Closed Innovation Model vs Open Innovation Model

The availability of funds increased thanks to the circulation of capital coming from Venture firms flooding the market with money that will allow ideas and projects to be developed also outside the firm. But innovation does not stop here. Chesbrough (2013) points out that the former R&D process has been partly replaced by bottom-up influences from customers and suppliers, the former aiming at state of the art products for better solutions, the latter willing to increase profits and to beat the competition from other potential substitutes. These new dynamics allow firms to lower the need for resources dedicated to R&D and furthermore reduce the risk of unsuccessful results shifting the engine of innovation from within the boundary of the company to catch it through external sources. With the move of the driving forces of innovation outside the firm, companies’ task is now to be able to interpret the market moves, understand the dynamic environment in which they are operating and hunt for technologies that can help the development of their current products or nonetheless improve them.