Open source innovation:
Rethinking the concept of openness in innovation
studies
Pénin Julien
BETA – Université de Strasbourg
penin@cournot.u-strasbg.fr
DIMETIC Lecture
April, 2009
 Open innovation (Chesbrough)
 Disintegrated or distributed innovation (Kogut,
McKelvey)
 Collaborative innovation
 Collective invention (Allen, Nuvolari)
 Collegial innovation (Mendonca)
 Free innovation (FLOSS)
 Open knowledge disclosure (Pénin)
 Free knowledge disclosure (von Hippel,
Harhoff)
All the same meaning?
Open versus closed innovation
“I call the old paradigm Closed Innovation. It is a view that
says successful innovation requires control.
Companies must generate their own ideas and then
develop them, build them, market them, distribute them,
service them, finance them and support them on their
own. This paradigm counsels firms to be strongly selfreliant, because one cannot be sure of the quality,
availability, and capability of others’ ideas: “If you want
something done right, you’ve got to do it yourself” […]
For most of the twentieth century, this paradigm worked,
and worked well, as evidenced by the spectacular
successes of central R&D organizations such as AT&T's
Bell Labs.”
(Chesbrough, 2003a, p. xx and xxi)
Open innovation: A new paradigm in
management sciences?
« Today, though, the internally oriented, centralized
approach to R&D is becoming obsolete in many
industries. Useful knowledge is widely disseminated,
and ideas must be used with alacrity. If not, they will be
lost. Such factors create a new logic of open
innovation, in which the role of R&D extends far beyond
the boundaries of the enterprise. Specifically, companies
must now harness outside ideas to advance their own
businesses while leveraging their internal ideas outside
their current operations.”
H. W. Chesbrough (2003)
« Open Innovation: The New Imperative for Creating and
Profiting from Technology »
Open innovation: A new paradigm in
management sciences? (2)
“The Open Innovation paradigm can be understood as the
antithesis of the traditional vertical integration model
where internal research and development activities lead
to internally developed products that are then distributed
by the firm […] Open Innovation is the use of purposive
inflows and outflows of knowledge to accelerate internal
innovation, and expand the markets for external use of
innovation, respectively. Open Innovation is a
paradigm that assumes that firms can and should
use external ideas as well as internal ideas, and
internal and external paths to market, as they look to
advance their technology”
(Chesbrough, 2006, p. 1; in Chesbrough et al., 2006)
Open innovation: A new paradigm in
management sciences? (3)
Closed innovation :
“projects can only enter in one way, at the beginning, and
can only exit in one way, by going into the market”
Open innovation :
“there are many ways for ideas to flow into the process,
and many ways for it to flow into the market”
(Chesbrough, 2006, p. 2 and 3; in Chesbrough et al., 2006)
Joy’s Law:“No matter who you are, most of the smartest
people work for someone else” (Bill Joy, Sun
Microsystems cofounder)
Open innovation vs. Innovation open
 Is open innovation really open?
– In house vs outsourced R&D
– Open innovation is: spin-in and out, licensing in and out, buy-out,
alliances, joint ventures, etc.
– Yet, knowledge is not available to all (it flows within closed
circuit)
 Open innovation is synonym to desintegrated, distributed
innovation, in the sense that innovation is not retained
into the hands of a single actor but distributed over a
wide range of actors
 Open innovation does not mean that knowledge is open,
in the sense of available to all
On the meaning of openness in innovation
studies
What is « open » and what is not?
 “a resource is “free” or “open” if (1) one can use it
without the permission of anyone else; or (2) the
permission one needs is granted neutrally” (Lessig,
2001; p. 12).
This suggests therefore that one can distinguish between
two levels of openness, a weak and a strong one:
 In a strong perspective, open means that one does not
have to ask for permission in order to use a resource.
The resource is not owned by someone who could
control for its access.
On the meaning of openness in innovation
studies (2)
 In a weaker sense, one may have to ask permission,
but this permission is not granted at the discretion of an
owner, who could therefore choose arbitrarily to refuse
or grant access to others. Permission is granted
“neutrally”.
 The contrary of an open world is therefore a world of
permission, of command or of control.
– Lessig: « The future of ideas » (2001); « free culture » (2004)
On the meaning of openness in innovation
studies (3)
 Following this definition, an innovation or a piece of
knowledge is open only if it is available to all, i.e. all
interested parties are given access to it.
 It is not retained into the hand of one or several
individuals who would control for its access.
 Knowledge exchange within alliances or joint ventures is not
open because it is not available to outsiders
 According to our weak definition of openness, access to
an open resource needs not automatically to be free of
charge
 Of course: “any positive price for access to intellectual property
potentially restricts access” (Cohen and Walsh, 2008, p. 9)
 Yet, if the price is “reasonable” and non discriminatory we
consider knowledge as being open in a weak sense.
In short: openness in innovation
 The notion of openness must deal with the availability
and condition of access to a resource
 A resource is open if it is available to all on conditions
that are « reasonable » and non-discriminatory.
 Open does not necessarily mean free of charge
Open access at a fee:
With respect to patented research tools created by industry
research, my concern is less with open use at a fee,
but with decisions not to make the tools widely
available” (Nelson, 2005, p. 137).
Open access at a fee: Example
The Cohen-Boyer patent
On the importance of openness in innovation
studies
 Innovation is cumulative
 Innovation is built on former knowledge, which must
therefore remain easily available
Core issue for upstream knowledge (basic science,
research tools in biotech, etc.)
“I do not know of a field of science where knowledge
has increased cumulatively that has not been
basically open.” Nelson (2004, p. 463)
“A free culture supports and protects creators and
innovators. It does this directly by granting intellectual
property rights. But it does so indirectly by limiting the
reach of those rights, to guarantee that follow-on
creators and innovators remain as free as possible from
the control of the past” (Lessig, 2004, p. xiv)
Open source innovation:
A tentative of definition
 Our concept of openness is different than Chesbrough’s
one, i.e. our definition of open innovation will not meet
Chesbrough’s definition
 To take this difference into account we introduce the
concept of open source innovation. An innovation is
open source if and only if it meets the three following
criteria:
(i) Voluntary knowledge disclosure from “participants”
(ii) Knowledge is open (“spillovers are not
controllable”)
(iii) Continuous and dynamic interactions among
“participants”
Open innovation and open source innovation
 Open source innovation is always open innovation
 Open innovation may not be open source
Example: alliances, joint ventures, etc.
 The case of crowdsourcing? Not always OSI –no
ongoing collaborations between the mass (example:
InnoCentive)
Open source innovation: examples
 Open science (Dasgupta and David, 1994; Stephan,
1996) / open, voluntary and collaborative efforts of
scientists
 Users centered innovation (von Hippel, 2005; Shah,
2005)
 Community based innovation: “In stark contrast to the
proprietary model, the community based model relies neither on
exclusive property rights nor hierarchical managerial control. The
model is based upon the open, voluntary, and collaborative
efforts of users” (Shah, 2005, p. 2).
 Collective invention (Allen, 1983; Nuvolari, 2004)
 FLOSS
 Human genome project (HGP)
The case of Collective invention: Allen (1983)
« In collective invention settings, competing firms freely release
to one another pertinent technical information on the
construction details and the performance of the technologies
they have just introduced. Allen has noticed this type of
behaviour in the iron industry of Cleveland (UK) over the
period 1850-1875 »
(McLeod and Nuvolari, 2008)
« ....if a firm constructed a new plant [more specifically, a blast
furnace] of novel design and that plant proved to have lower
costs than other plants, these facts were made available to
other firms in the industry and to potential entrants. The next
firm constructing a new plant built on the experience of the
first by introducing and extending the design change that had
proved profitable. The operating characteristics of the second
plant would then also be made available to potential investors.
In this way fruitful lines of technical advance were identified
and pursued »
(Allen, 1983, p.2)
« Formal presentations through papers presented to
engineering societies was the second channel through
which information was released [. . .] Papers were
presented which disclosed considerable detail about the
design and efficiency of different plants. The papers and
the subsequent discussion were printed in the
proceedings of the society [. . .] Since most of these
ironworks contained furnaces of several vintages and the
authors of the papers tried to use the resulting data to
estimate the impact of increasing height and temperature
on fuel consumption, an impressive amount of useful
information was made available to potential entrants. »
(Allen, 1983, p. 8–9)
The case of FLOSS
 The 70s’: open environment
 Tradition of collaboration and code sharing within developers
community
 The leading role of AT&T (Unix)
 End of the 70s’: surge of appropriation in software
(creation of a market)
 Fear: Closure of the code prevent collective work and
improvements
 Richard Stallman, FSF (1984) – GNU GPL (copyleft)
- Tradition of collaboration and exchanges within developers
community (share codes)
- Closure of the code prevent collective work and improvements
- Viral license: Access to source code only if agreement to keep
modifications free
 Aim: To warrant the freedom (not gratuity) of the code for
further research and thus to favour collaborations and
knowledge exchanges
 Major success: GNU-Linux, Apache, Sendmail
Three dimensions of FLOSS
 Technical (source code open)
 Legal (protection through special kind of licences, ex:
copyleft)
 Organisational (agora or bazaar mode)
Mean
Protection: copyleft
Source code open
Purpose
Collaboration
The law enables
an organisation of
innovation on the
mode bazaar
Extension: patents to secure open innovation
Objective: to preserve the freedom of a
technology (prevent appropriation by others)
 Patent or defensive publication?
 The control of downstream innovations
 « Legal jujitsu » (Benkler, 2006)
 Patent in a copyleft style (grantback
mechanism)
 Viral license
 The BIOS case
The BiOS initiative
Appropriability of
applications
Research Tools
RT1
RT3
Applications
RT4
RT2
RT5
RT6
Freedom of RTs
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Open source innovation as a platform
 Everything cannot be open source
 Open source and closed innovation are complementary
 « republic of science » and « kingdom of industry »
 Where to put the cursor?
 Open innovation provides a platform, a springboard for
private profits
– Ex: FLOSS. New BM based on complementary assets
 Firms have incentives to preserve and feed the common
platform
– Ex: creative industries. Video-Game industry (Cohendet &
Simon, 2007)
 The problem of free-riding?
– Limited: to benefit from the platform you have to contribute
Conclusion: work in progress…
 Open innovation vs. Innovation open
 Chesbrough defines a weak form of open innovation
Co-evolution of open innovation and corporate
innovation
 Open sphere central to innovation
 Creativity needs openness (Lessig, Christensen)
 Open as an efficient management mode
 Strength? Weaknesses?
 The patent issue: threat? Part of the solution?
 Open science vs. Science open
 University patent