Open Innovation and Regional Economic Development

Hypothesis:  If Pittsburgh knew what Pittsburgh knew, it would be unstoppable.

The amount of research and development talent in Western Pennsylvania -- in universities, government-sponsored research enterprises, and corporate R&D facilities, not to mention small labs, garages, and studios -- is extraordinary.  There are an awful lot of great people in town doing an awful lot of great, innovative work.

But too often, they don't know each other, and for want of collaboration, great innovations go undeveloped or are underdeveloped.  Innovator #1 and Innovator #2 may each have a critical piece of an innovation marriage made in heaven -- but those two people may occupy different innovation spaces altogether.  They may never meet, let alone discover that their ideas overlap in potentially productive ways.

Can the idea of Open Innovation help solve some of this complex coordination problem?  Open Innovation is business jargon; it means a lot of different things to a lot of different people.  Management gurus usually say that Open Innovation means a firm looking outside its walls for new ideas.   I'll define it differently:  structured sharing of pooled resources, sharing and collaboration that makes things possible that are bigger and better than what we'd see in a world of one-to-one dealmaking.  A whole that's greater than the sum of its parts.  The idea is connected both to what I wrote about in an older post here called "The Entrepreneurship Commons" and to my academic research on cultural commons.   In short, can Pittsburgh prosper by embracing the idea of sharing innovation, rather than hoarding and exploiting innovation?  I think that it can.  The hard question is how.

There are some modest examples of related things already in place.  My academic colleagues argue that tech transfer offices in universities perform some of this pooling function.  In practice, all too often tech transfer offices are barriers to collaboration rather than facilitators.  At CMU, Project Olympus was founded in part to get around that problem.  Olympus points in the right direction:  a successful collaboratory (a word that I claim no credit for) need not be tied specifically to any one university, or to any one institution.  In my Entrepreneurship Commons post, I wrote about a local example of a sort of innovation fair that the Pittsburgh Tech Council set up to underwrite new ideas for the hockey arena.

I'm thinking about this these days because a colleague pointed me to something called the Innovation Access Network, a project in Boston that's housed at the Massachusetts High Technology Council.  If you or your organization joins the Network, then you can post R&D problems and offer R&D solutions in a password-protected online venue.  Sort of a high-end Craigs' List for innovators.  Here is the FAQ.

The Innovation Access Network is an imperfect thing (aren't they all?), and it raises all kinds of questions.  There is a price of admission, which is pretty steep.  Why so steep?  What are the default IP/NDA rules for "seekers" and "requesters"?  (The language has a Harry Potter-esque feel.)  What are the starting points for negotiating future deals / partnerships, and does the host (the MHTC) take a slice?  How should individual, for-profit institutional, not-for-profit institutional, and government interests be handled differently?  These are not the only legal issues, and the legal issues are only parts of the equation.  The social structures are probably more important.  What kinds of trust relationships and other supplemental institutions are needed in order to make a pooling arrangement successful?  (How about another bit of business jargon:  Can Open Innovation succeed in an economy dominated by a zero-sum mindset?  If a positive-sum mindset is required, does the region have enough positive thinking juice to sustain an OI model?)  The Innovation Access Network is hardly the only example of Open Innovation practices.  Proctor & Gamble's "Connect and Develop" program is the most successful model that I have encountered.  But the Innovation Access Network is the only one that I know that tries to tailor a formal sharing model to the interests of regional economic development.  A regional model has challenges -- and opportunities -- that are distinctive.  Boston, for example, not only has this Open Innovation initiative but has also launched a live/work innovation cluster as it redevelops part of the South Boston neighborhood.  Take a look at this website for Boston's Innovation District.  How should the economics of innovation be linked not only to the sociology of innovation but also to the geography of innovation?

So:  How might Pittsburgh improve on this?  How might Pittsburgh build its own Open Innovation institution(s)?  That's a project that I and(or) the Pitt Law Innovation Practice Institute would like to help with.

Comments

2 Responses to "Open Innovation and Regional Economic Development"

Chris said... 3/10/2011 9:47 AM

Mike,

Attended an MIT Enterprise Forum event last night during which the panel of funders (Blue Tree, PLSG, IW, etc.) collectively lamented the absence of a well-known and well-defined source for locating capital. Perhaps another hook for the IPI.

Mike Madison said... 3/10/2011 9:53 AM

That's precisely one of the functions that a higher-level legal community could perform, and that's one of my visions for the IPI, to be sure. We're never going to see a one-stop shop for this kind of capital. At least I think that it's highly unlikely. If I'm buying a house or building a shopping center or buying a company, I still have to talk with mortgage brokers, commercial re brokers and lenders, or i-bankers. On the other hand, if IW or PLSG or BT, etc. want to sit down with me and others and figure out how to build something like this, I'd be an enthusiastic participant.

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Pittsblog 2.0 is written by Mike Madison, a law professor at the University of Pittsburgh. Send email to michael.j.madison[at]gmail.com. Mike also blogs at Madisonian.net, on law and technology. Chris Briem of Null Space drops by from time to time.

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