Open innovation: a success factor in Africa

Africa suffers from an endemic disease that burdens companies that want to expand there: too many imported products that have difficulty seducing local populations. Open innovation is the way to build products and services that are more relevant and valued by local African markets. It allows, from the upstream phase, to involve African stakeholders in the creation process.

What is open innovation?

Open and collaborative innovation, also known as Open Innovation, is an approach that involves mobilizing collective intelligence in the innovation process. The principle of open innovation is to solicit skills inside or outside the company to develop innovative products or services but also to respond to societal and environmental challenges. It can also be implemented by associations, public bodies. Innovation is no longer restricted to experts, but is intended to be participatory. The concept of Open Innovation was formalized in 2003 by Henry Chesbrough, Professor and Director of the Open Innovation Research Center at Berkeley University in California.

Some of its practices have been around for a long time and have in common collaborative relationships with external stakeholders. The most common case is that of a company working with a supplier to co-create a product and/or service. Business-university partnerships are another example. Open innovation can be practiced according to several degrees of openness:

• In-house employees from other departments than those traditionally dedicated to innovation;
• Suppliers, subcontractors, competitors, customers;
• Universities, entrepreneurs, start-ups;
• The general public, we talk about crowdsourcing.

Open and collaborative innovation can take different forms: collaborations, partnerships, innovation competitions (also called challenges or challenges), hackathons (competitions between programmers)…

It is a practice that breaks with the culture of corporate secrecy and yet is highly appealing. Today, it is widely spread in the business world with pioneers such as Procter&Gamble with its Connect + develop program or Unilever. In Africa, the main champion remains the Orange Group, which has chosen to incorporate societal impacts into its approach: the African Social Entrepreneur Award, Orange Partners, the organization of competitions for developers (Data4dev, Hackethon), the creation of incubators, etc. Similarly, many large groups, such as Barclays Africa organize innovation competitions in Africa to find “young shoots” or to respond to the problems they face.

All sectors have started: banking, energy, construction, …

What are the benefits to businesses?

Open innovation is a means of stimulating creativity and innovation, creating emulation around different issues, bringing new and out-of-the-box ideas, taking advantage of the entrepreneurial dynamism of start-ups and being as close as possible to the needs of its clients. To quote Bill Joy, co-founder of Sun Microsystems: “No matter who you are, most smart people work for someone else.”

Other benefits of open innovation include:

• increase efficiency by accelerating the innovation process;
• gain skills by engaging talent outside the firm;
• Mitigate innovation risks (reduced R&D costs, risk of shared failure among contributors).

How do we mitigate risk?

The main resistance to open innovation is related to data protection and intellectual property. Open innovation, however, in most cases requires the protection of intellectual property rights. The confusion arises from the association of open innovation with open source where knowledge or technology is freely available for use and improvement by the public.

The keys to success

For open innovation to create shared value, the implementation process must be structured and methodical. Key success factors include:

•   Identify and select the right partners: those that meet your needs;
• Define the degree of openness that corresponds to the need for their project;
• Define a clear and simple process for collaboration;
• Have appropriate technology tools that facilitate collaborative work;
• Define the rules of the game for intellectual property from the outset to take into account all stakeholders and to distribute the value generated by each equally;

Why is open innovation the best approach to success in Africa?

Today, companies around the world are taking over African markets. They flood Africa with imported products: thought, conceived and manufactured outside Africa by people who have very little or no knowledge of Africa and its realities. The ready-made solutions, mainly from developed countries, have shown their limited effectiveness: in the long term they are too expensive, too constraining or simply not adapted to living habits, the environment; populations are forced to make changes that do not correspond to them and which distort their DNA. Open innovation is the solution for creating products and services that meet the challenges of African markets.

Open innovation thus enables win-win relationships between companies, African players and their markets. Djouman’s objective is to facilitate open innovation by companies from all over the world on the African continent by offering a transparent and effective mechanism for connecting with African nuggets.

Photo credits:  FreeDigitalPhotos.net/Stuart Miles