Open innovation is inarguably a buzzword. At the very end of December, the Boston Globe ran an article about companies looking outside their walls for innovation. The article highlighted Prize4Life partner InnoCentive, among other examples of the for-profit world utilizing open innovation strategies.
A recent piece in Nature Reviews Drug Discovery discussed open innovation in the context of big pharma (another Prize4Life blog touched on this as well). Examples of incentive prizes pepper the headlines of business journals and popular press alike. Below are some more exceptionally good examples that I’ve found recently:
Several years ago Goldcorp, a gold mining company based in Toronto, Canada, was in dire economic straights. Faced with the possibility of closing, CEO Robert McEwen published Goldcorp’s geological data online and opened a contest—the “Goldcorp Challenge”—to find the best methods and estimates for prospecting. The competition offered approximately half a million dollars in prizes. Prize competitors identified 110 places on Goldcorp’s property, of which 80% yielded gold. Since the challenge launched, the company has found approximately 8 million ounces of gold, valued at over $3 billion. "We had applied math, advanced physics, intelligent systems, computer graphics, and organic solutions to inorganic problems. There were capabilities I had never seen before in the industry," says McEwen of the submissions in a Business Week article. "When I saw the computer graphics, I almost fell out of my chair."
In another particularly telling example, the Harvard Catalyst has followed Prize4Life’s lead. This week, and using federal stimulus money made available through the NIH, Harvard Catalyst launched a challenge with InnoCentive related to curing and treating Type 1 diabetes. Dr. Karim R. Lakhani, an assistant professor at Harvard Business School and one of the collaboration leaders, noted in a Harvard Catalyst release that, “Open innovation is an effective way to solve scientific problems in the business world.” Those who submit the best questions or ideas for the diabetes challenge (as determined by a review panel) will win between $2,500 and $10,000.
In the pharma world, GlaxoSmithKline recently announced an open innovation strategy to deliver medicines for those living in developing countries, partnering with BioVentures for Global Health.
Crowdsourcing has been ever-present in philanthropy lately as well. Initiatives range from the JP Morgan Chase Community Giving Campaign, which enlisted Facebook users to vote on a non-profit nominee to receive a $1 million grant, to Pepsi’s ongoing Refresh Project, which makes monthly grants based on members’ voted preferences.
However, along with this preponderance of open-innovation projects comes new criticism for the model. Scott Belsky writes in Business Week that those involved in crowdsourcing need to rejigger their model so that it empowers participants. "Those involved need to innovate and start harnessing the crowd in more mutually beneficial (and thus sustainable) ways”, he says. Belsky criticizes one of the central tenets of crowdsourcing, the "forces that enable crowdsourcing are being used to get thousands of people to do work for free". Check out some ideas for improvement in his article “Crowdsourcing is broken: how to fix it.”
As open innovation becomes a bigger part of both business and philanthropy, thinkers and entrepreneurs will have the opportunity to innovate on innovation—-to develop and perfect nuanced techniques that harness the power of the crowd in a way that enables, and ultimately helps, all parties involved. Stay tuned.
--By Meghan Kallman