In this paper from Harvard business school the concepts behind implementing open innovation, and setting boundaries that accommodate it, are examined.
The authors say that debates must move beyond open vs. closed boundaries to a point where firms simultaneously pursue a range of options for innovation and organizational design including open boundaries and open innovation. They say digitization and the increasing number of people who can participate in knowledge production at very low costs may lead to open innovation crowding out traditional forms of intra-firm innovation. This will have a profound implication for the design, boundaries, and identity of firms.
The authors explain the contrasts between traditional business practices or closed innovation and open innovation and open collaborations. There is a particularly interesting discussion about the contrasting organizational boundaries and organizational designs. The Harvard Business Review article suggests that open innovation is the perfect compliment to closed innovation.
This paper contrasts traditional, internal organization-centered models of innovation with more recent work on open innovation. These fundamentally different and inconsistent innovation logics are associated with contrasting organizational boundaries and organizational designs. We suggest that when critical tasks can be modularized and when problem-solving knowledge is widely distributed and available, open innovation complements traditional innovation logics. We induce these ideas from the literature and with extended examples from Apple, NASA, and LEGO. We suggest that task decomposition and problem-solving knowledge distribution are not deterministic but are strategic choices. If dynamic capabilities are associated with innovation streams, and if innovation types are rooted in contrasting innovation logics, there are important implications for the firm, and its boundaries, design, and identity.