Enterprise Ireland organised an excellent short conference October 2007 to increase understanding of and promote use of open innovation. To quote the conference organiser, Jim Cuddy of Enterprise Ireland, “open innovation is practised by firms that use external ideas as well as internal ideas to create value and advance growth”.

Innovation can be introduced in a closed innovation environment, including innovative new products, new services, and new business processes. Experience with closed innovation has been generally excellent but not consistently positive. There are a number of high profile innovations that have been exceptional in achieving the ‘customer delight’ factor, but have failed against less attractive competition because of business and marketing reasons.

The advent of open innovation has raised the issue of the appropriate business model in which to engage with other companies and with institutions. This has led to the ‘open business model’. As Professor Henry Chesbrough of the University of California Berkeley states “there is no way to know today exactly what any company’s future business model will look like; the only way forward is to conduct some experiments, gather the evidence, identify the most promising direction and then run some further experiments”. In software businesses, the use of the Software-as-a-Service (SaaS) model brings about a significant change to the operation of the business and creates a new business model.