(This is a throwback article from the January-February 2004 issue of Research-Technology Management and is the second publication made by Henry Chesbrough on the topic of Open Innovation after publishing his book in which he coined the term. It is adapted from a presentation he delivered at IRI’s 2003 Annual Meeting in Colorado Springs, CO. For the latest RTM article by Henry Chesbrough, check out the January-February 2017 issue, open to the public for a limited time!)

By Henry Chesbrough

Not long ago, internal research and development was viewed as a strategic asset, and even a barrier to competitive entry in many industries. Only large companies with significant resources and long-term research programs could compete. Research-based companies like DuPont, Merck, IBM, GE, and AT&T did the most research in their respective industries. And they earned most of the profits as well. Rivals who sought to unseat these firms had to ante up their own resources, and create their own labs, if they were to have any chance against these leaders. Today, the former leading industrial enterprises are encountering remarkably strong competition from many newer companies.   Continue reading →