Open Business Models: How to Thrive in the New Innovation Landscape by Henry Chesbrough, Harvard Business School Press (Manufactured by)

From the Publisher

In Open Innovation (HBS Press 2003), Hank Chesbrough described the large shift that has taken place in the way companies innovate over the decades of the twentieth century. From an information landscape where almost all of the valuable knowledge was concentrated in few places such as universities, large corporations, and governments, we've progressed to one in which this knowledge is almost everywhere. This means that companies can no longer rely on the old "closed" model of innovation, i.e. doing all of their own research, generating their own intellectual property (IP), marketing what fits with their business model and shelving what doesn't. The book articulated a new "open" model of innovation, arguing that companies must look outside their corporate boundaries for IP that they can purchase and bring in, as well as licensing their home-grown IP to others. With the seismic shifts that have occurred in IP over the last few years, Chesbrough's open innovation model has been recognized in the high-tech world and beyond as a keenly accurate description of the emerging business innovation environment. The book gets cited and mentioned a lot in the literature, and at technology and innovation conferences. In the first book, Chesbrough pointed to the business model as the key to taking advantage of the new environment and realizing a more open model of innovation. Now, in Open Business Models, he focuses-in on this all-important business tool, showing executives and managers how to think about their business model and to transform it in line with the new environment. He introduces a framework called The Six Stages of Business Model Development and provides diagnostic questions forcompanies to assess where they are. This framework will help companies to more clearly articulate what their business model is and show how they can advance along the six-stage continuum. He addresses the challenges and potential barriers to creating more open business models: the disconnect between IP management and the business model; the Not Invented Here syndrome; the Not Sold Here virus; among others. The legacies of the traditional closed model of innovation are very powerful and not easy to overcome. He introduces a new set of players and dynamics in the innovation world, what he calls "innovation intermediaries" operating in "intermediate markets for innovation." The pressures for commercialization of IP have, in a sense, forced the need for more open innovation models and have led to the creation of these intermediate markets and players to help facilitate companies' access to external technologies. Chesbrough also talks about how the legal structures for innovation are changing in interesting ways both constructive and problematic vis a vis driving the development of a "new innovation system. "As with Open Innovation, Open Business Models will contain lots of real world examples of companies in different industries, showing how these companies succeed and fail at opening up their business models.

About the Author: Henry Chesbrough is Adjunct Professor at the Haas School of Business at the University of California at Berkeley, and Executive Director of the Center for Open Innovation at the Institute of Management, Innovation, and Organization (also at Haas).

Wall Street Journal

Chesbrough is not the first academic to grasp the superior economic value of intellectual over tangible property in today's economy. But he may be the one who has thought most deeply about its consequences for business.

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