Product management glosary

Open Innovation

What is Open Innovation?


Open innovation is a term that refers to the process of bringing in external ideas and technologies to improve a company's innovation process. It is a collaborative approach that involves working with external partners, customers, and suppliers to develop new products, services, and business models.


The concept of open innovation was first introduced by Henry Chesbrough, a professor at the University of California, Berkeley, in his book "Open Innovation: The New Imperative for Creating and Profiting from Technology." Chesbrough argued that companies could no longer rely solely on their internal R&D departments to innovate and that they needed to look outside their organizations for new ideas and technologies.


Open innovation offers several benefits to companies, including:
  • Access to a wider range of ideas and technologies
  • Reduced R&D costs
  • Increased speed to market
  • Improved customer satisfaction
  • Enhanced competitiveness


One of the most well-known examples of open innovation is Procter & Gamble's Connect + Develop program. The program was launched in 2000 and aimed to bring in external ideas and technologies to help the company develop new products. Through the program, P&G has collaborated with over 1,000 external partners and has launched several successful products, including the Swiffer and Febreze. Another example is LEGO's LEGO Ideas platform, which allows fans to submit their own designs for new LEGO sets. The platform has resulted in several successful products, including the LEGO Ghostbusters set and the LEGO Doctor Who set.


Open innovation is a powerful approach to innovation that can help companies stay competitive in today's fast-paced business environment. By working with external partners, companies can access a wider range of ideas and technologies, reduce R&D costs, and improve their speed to market. As such, open innovation is a term that every product manager should be familiar with.