In the open innovation model, in contrast, a company attempts to commercialize both
its own ideas and research from other firms. It also finds external alternatives such as
spin-out ventures or strategic alliances to commercialize its internally developed R&D.
The boundary of the firm has become porous (as represented by the dashed lines in the
right panel in Exhibit 7.13 ), allowing the firm to spin out some R&D projects while insourcing
other promising projects. Companies using an open innovation approach realize
that great ideas can come from both inside and outside the company. Significant value
can be had by commercializing external R&D and letting others commercialize internal
R&D that does not fit with the firm’s strategy. The focus is on building a more effective
business model to commercialize (internal and external) R&D, rather than focusing on
being first to market.