Adopting External Innovation as a Competitive Strategy

There are many ways a profit-seeking company can maintain or achieve a competitive advantage, one of which is by adopting external innovation: ideas, concepts, technologies, finished products, etc., which support the company’s strategy and goals and which complement their internal innovation process. 

The concept is simple, but just being open to reviewing innovation does not suffice – there must be a strategy and process in place to identify, review, screen and incorporate external solutions.

While the Internet has certainly made it easier to find interesting products and technologies, it is on its own limited.  Having in place a dedicated technology scouting process and individuals tasked with implementing it at the local level, is likely the most effective way to identify, screen and review external innovation.  The company must also have in place a process of effectively integrating innovation such that the benefits of doing so significantly outweigh the cost of the process. 

A technology scout, especially one who operates in global markets, can build and maintain effective networks and communities (including with companies, universities and research organizations, government and incubators, etc.), search for innovation before it reaches public knowledge and mediate the relationship between the company and the sources of innovation thereby also addressing issues of language, culture and regulation.

External innovation can improve a company’s profitability by helping it reduce costs, or by creating greater and possibly newer sources of revenue.  In some cases, as often with cyber security solutions, external innovation can protect a company’s stability and viability.

Israel leads as a source of technological innovation, covering such fields as military and defense, medical, biomedical, pharmaceutical, imaging, semiconductors, mobile and fixed communications, gaming, environmental sustainability, agritech, cyber security, enterprise software and much more.  Medium sized and large companies in traditional and technological fields should consider adopting an external innovation process and take a close look at the Israeli market.

Ilan

ilan@ncompas.net

With contribution from “Profiting from External Innovation: A Review of Research on Open Innovation” Published on www.researchgate.net September 2011 by Joel West (Keck Graduate Institute) and Marcel Bogers (University of Copenhagen)