Invention is the creation of a new concept. Innovation is to bring the concept to practice, and commercial success.

Since ages, corporates have banked upon invention and innovation, to develop technologies internally for exclusive competitive advantage, using internal and fully sponsored resources. Expectation was, generated IP (Intellectual Property) would provide at least high multiple of the investments, by entering the market first. This is called closed innovation.

Using this approach, only few projects could be undertaken. In this VUCA world, when most businesses are getting impacted by quick developments in the technology, relying on few technologies alone is insufficient for business sustenance. Also, many research reports indicate the commercial success from the developed technology is not leveraged as much by the inventor, as much others do (Classic case being Xerox at PARC, where Steve Jobs famously observed, “Xerox could have owned the entire computer industry…could have been IBM of the nineties…could have been Microsoft of the nineties.” But, of course, Xerox was not). It is easy to see how such an internalised approach could quickly become restrictive.

Open innovation, on the other hand, promotes collaboration between internal and external players (customers, technology partners, etc).