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Innovation from use of New Media for Sharing Ideas and Business

document Cloud Labor, Distributed Knowledge, Open Innovation

Innovation from use of New Media for Sharing Ideas and Business

Michael Gebert marketing society, University of Glamorgan August 15 2012

Abstract

This paper examines the concept that; innovation grows from networks that are gained from the use of new media for sharing ideas in addition to sharing of business. It also discusses the theoretical framework of the latest research and outlines the power derived from combining of open innovation and social media to innovate innovation. The paper presents some examples so as to emphasize the impact and trends that have emerged in innovation due to the use of new media.

1 Introduction The innovation in social networking media has transformed the planet in the 21st century as it has been established that social networking sites, for instance LinkedIn, Orkut and Facebook, are increasingly being utilized in influencing consumers to increase their inclination towards viral marketing [1]. Not only has viral online marketing been achieved, but innovations have been seen in various sector e.g. education, health and finance, all emanating from the use of social networking. Swan & Robertson [2] cite innovation as a major reason for the surfacing of network structures. However, the extensive study of network structures has overshadowed the fact that there have been emergent diverse roles instigated by networking processes in various innovations. Indeed, network has led to innovation and processes of knowledge transformation.

1.1.Overview

The term ‘innovation’ can be defined as “the development and implementation of new ideas by people who over time engage in transactions with others in institutional context” [2]. Navi Radjou1 estimates that seventy five percent of CEOs spread across industries find external collaborations as indispensable to innovation [7]. Networking is identified as playing the core role in innovation, based on its platform of social network. OECD [3] views networking as a structure of ‘socio cooperation and collaboration’ among various individuals and organizations, and has become popular during the last few years. It is true that physical networks have existed for some time, in physical proximity, but the advent of new communication technologies and a drastic decrease in communication costs has contributed to the establishment of a wider network, spread across a much larger scope. Research on networks has established that networks can take a wide array of different structures, and that little consensus is arrived at in ascertaining its proper definition. It is safe, however, to state that within a network structure, several independent actors set up relatively slack relationships with each other so as to pursue an objective that is common to them all. Shavinina [2] attributes the main reason of developing network forms of organization as to encourage innovation. Little research has focused overtly on the relationship between innovation and networks. In addition, researches that have been undertaken to examine the link between innovations and networks have tended to be inclined towards the examination of impacts of network structures, resigning the area of social processes of networking to limited spotlight.

1

Navi Radjou is a principal analyst and vice president at Forrester Research [7].

2.

Introduction

2.1.Open innovation and social media

Since its inception by Henry Chesbrough in 2003, the concept of open innovation2 has gained outstanding momentum with 2.0 enabled web media [4]. The central idea behind the concept is that organizations should not rely exclusively on their research, but should instead seek to purchase license processes or inventions like patents from other organizations. Also, internal inventions that are not being used inside the organization should be shared with other organization, which brings the use of social media into focus. Pahnila, Väyrynen & Pokka [5] views the role of social media for companies as changing by the day. More and more companies are waking up to the fact that the social media presents immense potential as a source for research and development service innovations. The rapid growth of social media users has created a transformation into trends that now offer company’s new distinct opportunities to use the information and knowledge resources of social media. Research models on open innovation and social media have indicated that social media enhance information and knowledge sharing and are the platform upon which community-based research and development service innovation are orchestrated. Without the rich information provided by the social media users, virtual communities will possess only limited value and hence, the success of virtual communities in innovation is hinged on the communities’ abilities to exploit the members’ participation activities and
2

Open innovation is defined by Chesbrough as “a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology” [5]

invest in the creation of fresh knowledge [5]. Integration of social media enhances organizations’ efforts of aggregation and identification of sense out of the partitioned global knowledge and expertise base so as to be more supple and adaptive. Social media technologies enable companies to be more aware of the customer anxieties, needs and trends pertaining innovations and can provide guides and directions for further improvements and innovations [10]. In fact, research carried out by Economist Intelligence Unit 2009 showed that the addition of social media to the open innovation processes could outperform the likelihood to thrive innovation and help in shortening the channel followed in getting market-ready by almost twenty percent.

3.

Mckinsey’s LEAD approach Social commerce solutions are increasingly being made available and are

characterized by their fast evolving nature that makes venturing into social commerce a challenging feat [6]. To effectively undertake innovation in the commerce world while utilizing the social media, it is imperative for one to make use of Mckinsey’s LEAD approach that is outlined below. Listen. Monitoring of social commerce behavior in category that one is interested in, as well as in parallel categories should be the starting point to great ideas. Evaluation of the market and tools and optimal solutions that are required will give impetus to the conceiving of an idea that will be advanced towards looking for a solution. Use of the social media in tracking solutions that are currently being devised gives one an idea of how to go a step further. Learning about what is available by logging onto social sites and portals and keeping tabs on blogs and forums dedicated to providing the solutions will keep one abreast with the events. Experiment. Here, one should consider his choice of action; what does he want to accomplish? For instance, one may undertake a business model innovation and using it as a

platform, devise a few small-scale trials that are designed to deliver against his aims [6]. This gives one a preview of expected results and dissuades one against plunging head-on into risky undertakings. Apply. From the small-scale trials, one should select results that are most favorable and build on. By integrating social media strategies, one should be able to come up with an innovation that delivers value for the time and capital resources invested. Choice of techniques and toolsets should be appropriate, and based on whether one wants to improve a product or process [6]. It is essential for one to capture feedback during this process. Develop. Due to the evolving nature of social media and e-commerce, development of the innovation should be an on-going process; the innovator should always seek ways of improving his product by continuously integrating new insights, technologies and tools. Listening and responding to feedback from the social media will help in constant improvement of innovation, as well as injection of fresh ideas and concepts. 4. Application of open innovation and social media to innovate innovation 4.1. Open Innovation in the Chemical Industry: DuPont DuPont, a research based company, is credited with discovering and innovating various chemical fibers and new materials [8]. To solve mega-issues like those concerned with fossil fuels dependency, it is crucial for collaboration, openness and partnerships linking organizations, governments and other non-governmental organizations. The Polymer Science Park (PSP) was opened on 5th March 2012 in Zwolle, the Netherlands and it is an open innovation center that is founded by DSM, Wavin, higher learning institutions and government in the quest of making it the knowledge and innovation body in the polymer and coating sector. DuPont established central research laboratories that were construed to identify and commercialize an astonishing variety of synthetic fibers like Kevlar, Lycra and Nylon, using open innovation [9]. Use of external research and development in open

innovation creates significant value, as evident by the company’s success in its innovations. Internal research and design is also needed to work in tandem with external research and design, hence DuPont’s collaboration with other players in the sector. In contrast to other companies that only undertake funding of research and development, DuPont involves itself in generating innovations and commercializing them, in addition to funding. Together with other powerhouses like AT&T (with Bell Labs) and GE, DuPont is constantly looking to innovate through various research and development initiatives and the companies are considered as having cast the mold for a large number of research and development organizations [9]. Weigand uses the term ‘collaboratory’ to describe openness and collaboration i.e. a laboratory devoid of physical walls and lacking borders 3. No single organization or nation has the capability of single-handedly solving issues concerning food, energy and protection. Apart from making innovations, DuPont has invested heavily in sustainability. For instance, in the year 2011 alone, it launched in excess of 1,700 new products and invested twenty two percent of its $1.7 billion R&D budget on new chemistry and resources towards reducing reliance on fossil fuels. DuPont’s 2011 patents filings directly reflected on its research and development investment in its innovative innovations. Underlying factors that contributed to the success were the collaborative efforts of scientists, marketing teams and expert patent team. DuPont and PSP have undertaken to collaborate in innovation with external stakeholders so as to attain solutions in the most viable manner [10]. Its use of open innovation is hinged upon the notion that without sharing, it is impossible to multiply. The company believes that for better, quicker and cheaper multiplication, it is imperative for companies to open up more

3

Mr. Weigand oversees sustainability initiatives at Dupont [10]

and engage in collaborations in research and development. The social media has opened up this avenue to them, just by the sheer numbers of users who frequent social sites. 4.2.Unilever’s Open Innovation Model Unilever introduced a new online platform that allows experts to assist the company in finding solutions to technical problems with the view of moving towards its objective of doubling its business size, while at the same time, recording a decline in its environmental impact [11]. The company has a long history of engaging in collaboration with its partners in development of products, but this was its debut in publicly sharing of research projects in open forums. Based on its efforts aimed at reducing the impacts of its operations on the environment, Unilever presents a list of challenges that experts should help it in addressing. For instance, the company requires technologies that can achieve its aim of bringing safe water to the poor sections of the world’s population at less than one cent per liter [11]. The company also requires new active ingredients for their cleaning products that inactivate viruses. This should be done without the dependence on bleaches alcohols or strong acids. Unilever also lists technology that allows further reduction of the amount of sodium in food as one of its wants. Though, the reduction of sodium should not affect the products of the company’s that taste ‘great.’ Unilever boasts of strong research and development teams that are spread throughout the globe which consistently make innovation breakthroughs to help Unilever maintain its place at the head of the pack in product development and design. Since the company appreciates the brilliance of the minds of people who may not be part of their research and development teams, the company is always in the search for new ways to tap into those knowledge potentials by working with them. These people, as the company acknowledges, have fresh and serious approach to coming up with productive and new technology. In collaborating with other partners in open innovation, both parties are granted the freedom to

perform business transactions in new and revitalizing ways; creating significant value in the process. It integrates the expertise and experience of the company in sustainable innovation with the fresh thinking and creativity of partners, helping to create new business models with potentials for furthering innovation ideas [11]. The successful open innovation model envisioned by the company is viewed as being essential to achieving its ambition of doubling its business size, while at the same time, reducing the impact of its activities on the environment. Social media as an accelerator for open innovation. The company also integrates the use of social media as an accelerator to help its open innovation process to be quick, better and cost effective in keeping it ahead in product development and design and, subsequently, double its business [11]. Unilever’s Wants are opened up to a wider, global audience by the social media which also helps it in faster gathering of ideas through tapping into niches and specialisms of partners and exchange and consolidation of ideas. The use of social media makes it cheaper since company is able to iteratively validate the process itself as well as shortening the marketing channel since collaborators will act as propagators for the cocreated solutions. Engagement. Long term engagement by Unilever in keeping people interested in its Wants is vital to the model [‘s success in the long run [11]. It is also crucial in maintaining the platform’s visibility and its existence, so as to be able to attract the required people to collaborate with. Attract and seek. The social media offers a method for attracting the suitable people to their suitable challenges, due to its transparency. Another way is by ensuring the right people are actively sought and ensuring they are found. This has the implication of benefiting Unilever and its open innovation platform through outside-in attention and promotion, as well as inside-out discovery of partners to collaborate with.

Conclusion Investment in open innovations through internal and external research and development is increasingly being used to draw the line between successful companies and those that are not. [9]. Companies that intensify open innovation activities are bound to be ahead of their competitors in terms of product design and development and, subsequently, in market share and brand reputation. Integration of open innovation models with social media has led to rapid transformations in the world of research and development, particularly in the rate of innovations and patent filings. Innovation continues to become difficult by the day [8]. This requires organizations to consider being innovative in the area of innovation i.e. innovate innovation. But, in the quest to substantive innovation, social and environmental issues are altered, and thus, the need for processes that are sustainable to these aspects as in the cases of DuPont and Unilever, above. Companies are continuously seeking to improve their products’ designs, as well as develop new ones and open innovation enables them to do so by tapping into and building on ideas and concepts presented by partners. The increased use of social media and the evolving technologies in the area has also made the process quicker, better and cheaper, and this helps companies in achieving their business goals. Integration of open innovation and social media could possibly contribute substantially to innovate innovation. References

1. Pani, A., Sharma, M.: Innovation in Social Networking Media and their impact on the Buying Behavior of Gennext Consumers in India: A new face of Viral Marketing. Vol 1, No 1 (2011) 2–15 2. Shavinina, V. L.: The International Handbook on Innovation. 1st ed. Elsevier, London (2003) 680-700

3. OECD: Schooling for Tomorrow Networks of Innovation: Towards New Models for Managing Schools and Systems, OECD Publishing, MA, (2003) 50-71 4. Sharman, R., Rao, R. H., Raghu, S. T. : Exploring the Grand Challenges for Next Generation E-Business: 8th Workshop on E-Business, WEB 2009, Phoenix, AZ, USA, December 15, 2009, Revised Selected Papers, Springer, New York (2010) 19-23 5. Pahnila, S., Väyrynen, K., Pokka, T.: Participating in open innovation of services in social media, Sprouts:working paper on information systems ISSN 1535-6078, (2011) 11-61 6. Marsden, P.: Social Commerce: Monetizing Social Media, GRIN Verlag, (2010) 13-15 7. Nambisan, S.: Information Technology and Product Development, Springer, Pittsburgh, (2009) 140-145 8. Chesbrough, W. H.: Open Innovation: The New Imperative for Creating And Profiting from Technology, Harvard Business Press, Boston (2006) 6-67 9. Davenport, H. T., Leibold, M., Voelpel, C. S.: Strategic Management in the Innovation Economy: Strategic Approaches and Tools for Dynamic Innovation Capabilities, John Wiley & Sons (2007) 133-160 10. Cuccureddu, G.: Open Innovation in the Chemical Industry: DuPont & the Polymer Science Park Show Why, Innovation Management (March 16, 2012) 11. Cuccureddu, G.: Unilever’s Open Innovation Model Fundamental to Achieve Sustainable Growth, Innovation Management (March 30, 2012)

Summary This paper examines the concept that; innovation grows from networks that are gained from the use of new media for sharing ideas in addition to sharing of business. It also discusses the theoretical framework of the latest research and outlines the power derived from combining of open innovation and social media to innovate innovation. The paper presents some examples so as to emphasize the impact and trends that have emerged in innovation due to the use of new media

Description The innovation in social networking media has transformed the planet in the 21st century as it has been established that social networking sites, for instance LinkedIn, Orkut and Facebook, are increasingly being utilized in influencing consumers to increase their inclination towards viral marketing. Not only has viral online marketing been achieved, but innovations have been seen in various sector e.g. education, health and finance, all emanating from the use of social networking. However, the extensive study of network structures has overshadowed the fact that there have been emergent diverse roles instigated by networking processes in various innovations.

Tags: Innovation, Knowledge, open innovation.crowd knowledge, Social Media

Posted by Michael Gebert

Aug 17, 2012 01:05 pm GMT Viewed 1937 times

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