In 2006, we started publishing the results of our research
on how to make ‘asymmetric’ partnerships work. Our work was focused on the
asymmetry of company size, age, and technical and commercial maturity between
two organisations seeking to work together on an innovation project, i.e. a
situation exemplified by technology-based start-ups seeking to work with large,
long-established firms. This research
had been kick-started by first-hand observations of the challenges faced by
technology start-ups within the Cambridge high-tech cluster that were seeking
to partner with large, mature firms. We
took an engaged scholarship approach [1] to the work, and the results were disseminated via academic conference papers [2-4]
and journal articles [5, 6],
and a series of events and other practitioner-focused outputs [7-9].
Nearly 10 years on, it is interesting to observe whether things
have changed. Firstly, there has been
the diffusion, maturing and refinement of open innovation as a concept [10-15],
and widespread recognition by larger firms of the implementation challenges
that need to be overcome. When we began our work, many multinationals viewed
working with start-ups as a novelty, and approached such collaborations with
(what they admitted themselves) was a pretty high level of naivety. It seemed
so simple: big companies were being
driven to – or were choosing to – open up their innovation activities and draw
upon a wider range of sources of innovative ideas; start-ups with innovative
ideas were lacking the resources they needed for commercialisation, and so collaboration
seemed like an obvious and effective strategy. Our research showed the
implementation of such an approach to be much more complex and risky for both
parties than anticipated [6]. Today, there seems to be a greater level of
awareness on the part of larger firms of the challenges of making such
asymmetric partnerships work. Attitudes
to working with start-ups seem to have followed the shape of a hype cycle
[i]:
huge enthusiasm coupled with unrealistic and then unmet expectations,
re-thinking, leading to a more balanced set of exploration (i.e. looking for
new ideas) and exploitation (i.e. creating and capturing value from current
ideas) activities. Organisationally and
operationally, the set-up and management of these partnerships has moved from
being a predominantly corporate venturing-focused activity (and thus affected
the ups and downs of senior management enthusiasm that mirrors the wider venture
capital investment cycle) to something more integrated with R&D, procurement,
legal, and dedicated open innovation teams. As a somewhat peripheral issue, it has also
been interesting to observe the affect how the increased digitization and
servitization of technologies seems to have enabled partnerships: smaller firms providing various digital
technologies (especially mobile apps) to add more customer benefit based around
the core technology.
Secondly, have start-up firms become more proficient than
their predecessors at setting up and managing partnerships with larger firms? This
is very hard to judge, but given that their potential partners now seem to have
more sophisticated mechanisms for engaging with them, it could be expected that
more start-ups will be forming such partnerships and consequently refining
their own partnership skills. Emerging
concepts in entrepreneurship - –such as
the Lean Start-up methodology [16]
– may also being playing a role (though
the complexity and slowness of setting up partnerships may be in conflict with
the minimal viable product / pivot mindset).
There may also be differences in
partnership activities between start-ups focused on the commercialisation of a
physical product, as opposed to those based on software. The partnership
challenges facing a start-up focused on the commercialisation, for example, of
advanced materials [17, 18]
compared to one focused on app development [19]
are both significant, share some similarities but also have some major differences.
Thirdly, there is the evolving role of clusters. Research on
this topic shows that the location of the start-up may also impact their
partnership capabilities [20, 21]. For a region such as Cambridge, the steady
influx of large companies may have encouraged and made such partnerships more
visible. Having large firms locally
whose staff are actively engaged with the networking activities reduces at
least some of the transaction costs of partnership formation and management. This is linked to another issue; that of the
ability of the start-up to recruit talent from large companies and the
willingness of experienced managers to join start-ups. This is in turn is underpinned
by a range of factors, including both the actual and perceived impact that
start-ups can have on changing industrial structures (e.g. everyone wants to
join the next Uber).
Finally, there is the role of open innovation intermediary
activities and actors that has become more common in the past ten
years. These range from platforms for matching ideas
and needs (e.g. Innocentive, NineSigma, et al.) through to consultancy services
targeted specifically at supporting open innovation [22].
These four issues highlight the changing context within
which 'asymmetric' partnerships are formed and may be leading to more firms
developing the capability to establish and manage these types of partnerships.
2. Minshall,
T.H.W., et al. Development of a
management guide for partnerships between technology-based start-ups and
established firms. in International
Association for the Management of Technology (IAMOT) EuroMOT Conference 2006,
September 10 - 12. 2006. Aston Business School, Aston University,
Birmingham, U.K.
3. Minshall,
T.H.W., L. Mortara, and J.J. Napp. Implementing
Open Innovation: Challenges in Linking Strategic and Operational Factors for
HTSFs Working with Large Firms. in 15th
High Tech Small Firms Conference, 14-15 June 2007. 2007. Manchester
Business School, Manchester, UK.
4. Minshall,
T.H.W., L. Mortara, and J.J. Napp, Open
innovation: Linking strategic and operational factors, in R&D Management Conference 2007, 4-6th
July 2007. 2007: Bremen, Germany.
5. Minshall,
T.H.W., et al., Development of
practitioner guidelines for partnerships between start-ups and large firms Journal of Manufacturing Technology
Management, 2008. 19 (3): p. 391 -
406.
6. Minshall,
T.H.W., et al., Making 'asymmetric'
partnerships work. Research Technology Management, 2010. May-June: p. 53-63.
7. Minshall,
T.H.W., Big Fish, Small Fish, in Catalyst. 2006.
8. Minshall,
T.H.W., Partnerships between
Technology-based Start-ups and Established Firms: Making them Work, in IfM Briefing. 2006.
9. Oughton,
D., L. Mortara, and T. Minshall, Managing
asymmetric relationships in open innovation: lessons from multinational
companies and SMEs, in Open
innovation in the food and beverage industry, M.G. Martinez, Editor. 2013,
Woodhead Publishing: Cambridge, UK.
10. Chesbrough,
H., The era of open innovation. Sloan
Management Review, 2003. Spring 2003:
p. 35-41.
11. Chesbrough,
H., Open Innovation: The New Imperative
for Creating and Profiting from Technology. 2003, Boston: Harvard Business
School Press.
12. Chesbrough,
H., Open Business Models. 2006,
Cambridge MA: Harvard Business School Press.
13. Chesbrough,
H. and K. Schwartz, Innovating Business
Models with Co-Development Partnerships. Research Technology Management,
2007. 50(1): p. 55-59.
14. Gassmann,
O., E. Enkel, and H.W. Chesbrough, The
future of open innovation. R & D Management, 2010. 40(3): p. 213-221.
15. Mortara,
L. and T. Minshall, Patterns of
implementation of open innovation in multinational corporations in New Frontiers in Open Innovation, H.
Chesbrough, W. Vanhaverbeke, and J. West, Editors. 2014, Oxford University
Press.
16. Ries,
E., The Lean Startup: How constant
innovation creates radically successful businesses. 2011, Penguin.
17. Lubik,
S. and E.W. Garnsey, Commercializing
nanotechnology innovations from university spin-out companies.
Nanotechnology Perceptions, 2008. 4:
p. 225-238.
18. Maine,
E. and E.W. Garnsey, Commercializing
generic technology: The case of advanced materials. Research Policy, 2006. 35: p. 375-393.
19. Bharadwaj,
A., et al., DIGITAL BUSINESS STRATEGY:
TOWARD A NEXT GENERATION OF INSIGHTS. MIS Quarterly, 2013. 37(2): p. 471-482.
20. Weiss,
D. and T. Minshall, New perspectives on
Open Innovation: The role of relative proximity on open innovation
implementation in UK high-tech SMEs, in 26th
International Conference on Manufacturing Research, 11-13 September 2012.
2012: Aston Business School, Birmingham, UK.
21. Weiss,
D. and T.H.W. Minshall, Negative effects
of relative proximity and absolute geography on open innovation practices in
high-tech SMEs in the UK, in 7th IEEE
International Conference on the Management of Innovation and Technology (ICMIT
2014) 23-25 September. 2014, Received 'Best Paper Award': Singapore.
[i]
http://www.gartner.com/technology/research/methodologies/hype-cycle.jsp
For the past 7 years, I have been visiting Japan each year to work with colleagues in Kyoto on various projects relating to the management of technology, 3D printing and open innovation. Back in 2009, we held an event at Doshisha University with members of the local business community that discussed, among other topics, open innovation. Yesterday, at the same location, a forum was organised by Professor Toshiro Kita to bring together Japanese firms that are implementing open innovation. Listening to the talks and discussion it was very clear that much seems to have changed since the start of the decade in terms of attitudes and actions relating to open innovation. This post provides some quick initial reflections on 'then and now', with a more detailed summary of the actual event to appear on the Doshisha Business School website shortly (along with the speakers' presentations). 
