Open innovation

Open innovation is a term promoted by Henry Chesbrough, adjunct professor and faculty director of the Center for Open Innovation at the Haas School of Business at the University of California, in a book of the same name, though the idea and discussion about some consequences (especially the interfirm cooperation in R&D) date as far back as the 1960s. The term refers to the use of both inflows and outflows of knowledge to improve internal innovation and expand the markets for external exploitation of innovation.

The concept is also related to user innovation, cumulative innovation, know-how trading, mass innovation and distributed innovation.

“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 the firms look to advance their technology”. Alternatively, it is "innovating with partners by sharing risk and sharing reward." The boundaries between a firm and its environment have become more permeable; innovations can easily transfer inward and outward.