Open innovation, the collaborative practice of engaging with external partners to co-create new value, has become an indispensable driver of business success. With a multitude of challenges on the horizon, including sustainability issues, organizations must harness the full potential of open innovation to accelerate their responses and seize future opportunities.
This reality is clearly reflected in the results of our survey of 1,000 large organizations. A remarkable 75% of respondents highlighted the critical role of open innovation in addressing complex business challenges, and 71% intend to increase their investment in open innovation over the next two years. Organizations are adopting a variety of approaches to open innovation, including business accelerators, incubators, venture capital initiatives, venture capital, company formation, crowdsourcing, and the creation of open innovation labs. Notably, New York, London, and Paris emerged as the top three cities likely to invest more in open innovation labs over the next two years.
Open innovation generates a wide range of benefits: 55% of organizations report increased innovation speed, while 62% see improved employee agility and adaptability. Additionally, more than 60% have reaped financial rewards, resulting in increased revenue and operational efficiency. Additionally, open innovation is proving instrumental in supporting organizations’ sustainability goals, with 63% citing marked improvements in environmental sustainability metrics as a direct result of their open innovation efforts.
However, organizations have yet to realize the full potential of open innovation. Just over half of surveyed organizations rate their open innovation performance as “above average” or better, and only 22% rate their performance as “good” or “excellent.” Our research highlights that organizations are not fully engaging in open innovation, often preferring traditional partnerships with customers and suppliers rather than exploring new sources of innovation.
In our report, we examine the distinctive characteristics that distinguish organizations that achieve superior results through open innovation. We also provide insights into how organizations can improve the effectiveness of their open innovation initiatives. Maximizing the benefits of open innovation requires establishing a strong foundation for success and implementing specific measures to further increase the impact of open innovation efforts.