Confidentiality. This is the big issue on the client side

Companies using Open Innovation Platforms are mostly concerned by the confidentiality of the information they provide to the intermediary and to the rest of the world. Even if the name of the company remains anonymous, it may be easy for competitors to guess who is behind the problem, which is a serious issue. Putting a problem online and broadcasting it to a priori unknown solvers is too sensitive for many companies, and is a significant break for the use of Open Innovation platforms. Online Non-Disclosure Agreements proposed to solvers is not a satisfactory solution as anybody can sign them without real engagement or verification.

Intellectual property (IP) management is yet another extremely touchy aspect

Who owns the solution provided by a solver through the Internet platform of an intermediary? The client company, also called seeker, wants to own the IP to use the solution without any restriction and gain competitive advantages.  As for the solver, he or she may fear to give up his or her IP rights, but has to do so if he or she wants to get paid.

In an ideal world, an Open Innovation platform would allow solvers to seamlessly transfer their solution IP to the seeker. In practice, such a feature does not work. Even with terms-of-use of the type “As soon as any solution is submitted to xxx, its IP rights are also transferred to xxx”. This cannot work on a generic basis, because, most of the time the solver does not own the IP from the start. Indeed, the solution may already be patented by others or worse, it may not be patented, and because the solver (say a researcher in the public sector) has an employer, the IP belongs to this employer. Such IP management leads to unsatisfied clients, unsatisfied research centers and unsatisfied solvers.

Summary: Why Open Innovation Platforms Fail

Overall, Open Innovation crowdsourcing platforms, although they are still a very promising concept, have failed to provide fully satisfying services. The main issues have been:

  • To attract and to engage sufficient number of qualified experts in a sustainable way,
  • To properly match seeker problems with potential experts,
  • To incentivize clients to be fair and reward promising solutions,
  • To properly protect confidentiality and intellectual property.

The present article is after the chapter we wrote in the book “A Guide to Open Innovation and Crowdsourcing: A Compendium of Best Practice, Advice and Case Studies from Leading Thinkers, Commentators and Practitioners“.