by Stefan Lindegaard
What is the ROI – return on investment – for companies engaged with open innovation? I can imagine that many executives ask this question as they seek out more proof that open innovation is worth doing.
Truth told, there is much talk about the ROI, but it is very difficult finding solid documentation on the value of open innovation. I tried, but not much luck. This is a short list of cases on the topic.
I have previously written about research done by Belgian management school Vlerick in which it shows that the costs are higher than the financial benefits in the short run. However, the authors say” Indeed, in the short-term the costs are particularly visible, while the benefits take longer to manifest. A bit of patience and staying power are apparently essential.”
InnoCentive is working together with Forrester Consulting to document the value of using open innovation – and in particular their services and platforms. Case 1 shows a multinational agricultural company that achieved a ROI of 182 percent with payback in less than months. Case 2 shows that global consumer goods company SCA achieved a return on investment of 74 percent with pay in less than three months.
Boston Consulting Group publishes an annual survey on innovation. The 2009 edition does not get into ROI on open innovation in particular, but it does have some observations on return on innovation in general. One observation is that about 50% of their respondents are satisfied with their innovation ROI.
I know this is very pale so please leave a comment if you know of cases that provides solid documentation on the ROI on open innovation…