Innovate or Perish: Managing the Enduring Technology Company in the Global Market

External Providers

A new tool for open innovation emerged with the emergence of external providers. These providers work closely with industrial sponsors to identify technology globally that meets the sponsor’s needs. The advantage of these tools is that there is low risk if a solution is not found. Another big advantage is the breadth of diverse thinking that is accessed through the global networks. Two of the major providers are InnoCentive and NineSigma.

InnoCentive (www.innocentive.com) has a unique business model. Seeker companies post a problem (“challenge”) on their Web site. They also post the “bounty” for receiving a solution that meets their criteria. Solvers propose solutions through the Web site. Seekers receive IP ownership in paid solutions.

InnoCentive’s Web site indicates that scientists from over 170 countries around the world are registered as solvers. InnoCentive started with expertise in organic chemistry problems but have since branched out into the fields of biology and material science. According to a recent article, seeker companies turned to InnoCentive largely for assistance with organic synthesis problems because they were easy to define in terms of cost, yield, purity, scalability, and material supply. One client with 12 discrete chemistry challenges reported a very high return on the investment in InnoCentive’s services.^[12] NineSigma (www.ninesigma.com) also has a unique business model for open innovation. They are building targeted global innovation ...