7 trends in Open Innovation in 2024

It is very exciting to follow the development of an industry from its inception by Henry Chesbrough at Berkeley in 2003 to its maturity. As founders of Boro Oy, our work in Open Innovation started more than 15 years ago, and we are always glad to share useful observations on its growth and evolution in different shapes and models.

We believe that understanding Open Innovation landscape and trends is crucial for any organization that has an objective to design a sustainable innovation strategy.

Now is a good time to look back on the Open Innovation trends of the year 2023 that we expect to follow through 2024.

1. Shift from the ‘why’ to the focus on tangible results of Open Innovation

Some 5-7 years ago innovation strategy discussions would start with ‘Are we sure we need to do it?’ As of now, corporations are no longer questioning whether they should innovate and most of them already have innovation strategies in place. Innovation (both open and closed) is starting to be perceived as a necessity for organization’s competitiveness and market leadership. And while Open Innovation still maintains its spirit of experiment and improvisation, the big hype around innovating for the sake of being visible in the industry is over.

We are seeing much more understanding of the importance of metrics and KPIs, analyzing ROI and value for business. It is no longer enough to report innovation initiatives or host startup pitch days: the eyes of the ecosystem are on the outcome.

2. Open Innovation verticals have crystalized: the big move from generic to industry-specific innovation

We used to think of Open Innovation as a horizontal cross-industry concept. However, with the evolution of innovation models and instruments, industry specialization has become very important. Generic innovation expertise is not enough: in order to drive results, it needs to be complemented by vertical competences (ex, foodtech, manufacturing, healthcare, spacetech etc). Deep industry expertise is essential for efficiency and program's success.

This trend leads to further specialization of Open Innovation players with new leaders emerging in each market (as opposed to generic Open Innovation agencies).

3. Education and change management are still important innovation drivers

Even experienced innovators are in constant need of learning and educating their resources about novel solutions and trends in the industry. We see that the value of education is now widely recognized. Solid innovation strategies cannot be built on weak foundations, and laying the foundations always starts by bringing new learnings inside an organization.

The same with change management: it is still very relevant to remove barriers for innovation inside the organization and align efforts, drive execution. Thus, quality content and advisory are becoming more and more relevant.

4. Ecosystem engagement gains momentum

Earlier, corporations would innovate essentially in silos and the same was applied to infrastructure, education or public sector. Today ecosystem stakeholders have recognized the value of collaboration - we see cross-industry innovation projects and consortiums that are able to solve complex problems.

Innovation ecosystems are now mature enough to build more links with other players and we expect to see more of these collaborations becoming successful. We also think ecosystem engagement will climb up in the list of priorities for organizations engaged in innovation strategy development.

5. Corporate innovation models multiply

Corporates are still at the forefront of Open Innovation, even though other players from the public sector or education are getting in the game. What used to be just a corporate innovation department or a CVC (corporate venture capital arm), is increasingly becoming more complex. Many different models with various objectives have emerged, for example:

- Corporate accelerators that are now also specialized in specific verticals (from supply chain to consumer interface)

- Corporate venture arms, that may invest purely for financial gain or to fit the strategic vision of a corporate

- Testing environments which are usually physical spaces where a corporate can watch startups work and decide whether they fit its business needs

- Accelerators and incubators with corporate participation but created together with other ecosystem players that enjoy the synergies an ecosystem collaboration can bring

- Less regular Open Innovation initiatives: calls, challenges, pitch days, usually focused on a very specific topic

In addition, the roles of different departments became dual as they tend to have an open innovation role specific to their function (R&D, for example) and another role on the commercial side of the organization as a whole.

We believe it to be important for innovators to follow and understand the development of those models to keep track of the industry.

6. Smaller players are catching up

Big names are still dominating the news about Open Innovation partnerships, deals and acquisitions, but the industry is no longer a prerogative of just large players. We are pleased to observe that medium- and smaller size players are actively stepping in.

While big corporates have budgets and processes in place, smaller players bring their own advantages: being quick and flexible, more approachable and usually having an urgent and specific need to solve. Quite often smaller players are executing their innovation activities via ‘multi-brand’ programs where they can share the costs and leverage economies of scale in ecosystem development, scouting and communication.

7. Industry complexity creates space for Open Innovation experts

It is becoming increasingly hard to stay updated about all innovation trends, find and meet emerging startups as well as do all the internal work on education and change management. Thus, the role of industry-specific players - like vertical accelerators - becomes more prominent as they can solve two problems: bring the necessary expertise and dealflow together with saving costs of doing a branded innovation initiative.

Amidst the overall economic and investment downturn that 2024 might bring, there is always space for innovation and new breakthroughs. We are excited to see what this year will bring to the industry and we will keep sharing our insights.