Open innovation is a framework for
R&D that proposes permeable firm boundaries to allow a firm to benefit not only from
internal ideas and inventions, but also from ideas and innovation from external sources.
The sharing goes both ways: some external R&D is in-sourced (and further developed
in-house) while the firm may spin out internal R&D that does not fit its strategy in order
to allow others to commercialize it. Even the largest companies, such as AT&T, IBM,
and GE, are shifting their innovation strategy toward a model that blends internal with
external knowledge-sourcing via licensing agreements, strategic alliances, joint ventures,
and acquisitions. 72