Key Challenges in Open Innovation: Insights from our Open Innovation Advisory Board
Meeting Report: September 2025
Participants: UC Berkeley Open Innovation Advisory Board Members
Introduction
After establishing the core challenges to open innovation and exploring the transformative impact of Artificial Intelligence, the third meeting of our Open Innovation Advisory Board focused on foundational principles. The objective was to consolidate a shared understanding of what Open Innovation is and, just as importantly, how it is being actively applied in leading organizations today.
This white paper synthesizes the collective wisdom of the board, presenting a multi-faceted definition of Open Innovation and a practical framework of its application. The insights reveal that Open Innovation is not a monolithic concept but a strategic, holistic approach that blends external collaboration with deep internal alignment.
Part 1: A Consolidated Definition of Open Innovation
Across the roundtable discussions, a clear consensus emerged: Open Innovation is a strategic and collaborative process designed to accelerate progress by systematically leveraging external resources, ideas, and talent. It involves intentionally managing the flow of knowledge across organizational boundaries. Several key themes defined this concept:
1. The Principle of Porous Boundaries
A core tenet of Open Innovation is the creation of “porous boundaries,” allowing for a dynamic, two-way exchange. This manifests in two primary modes:
- Outside-In: The process of bringing external ideas, technologies, and talent into the organization to solve internal challenges and accelerate R&D.
- Inside-Out: The practice of allowing internal ideas, intellectual property, and talent to be commercialized externally, a model one group described as to “bring in talent with a good idea and help foster it. Then spin it out.”
2. A Strategic Lever for Growth
Open Innovation is not merely a tactic but a “strategic lever.” Board members described it as a vital discipline, with one group stating it is “a must to stay at the forefront of innovation.” This strategic importance is rooted in its ability to connect well-defined internal needs with a global ecosystem of potential solutions, acting as an “enabler for ideas” and giving organizations the “ability to push boundaries.”
3. A Multiplier of Resources and Ideas
At its core, Open Innovation is a mechanism for resource and idea generation. It is about finding and developing the best new ideas, “regardless of the source.” This involves:
- Diverse Collaboration: Engaging with a wide array of external partners—including “academia, big tech, startups, government agencies, etc.”—to get “out of the bubble” and incorporate different points of view.
- Joining Forces: It allows for “joining resources to enable work that couldn’t happen otherwise.” This collaborative spirit, however, requires a “smart balance between IP protection and data sharing” to be successful.
Part 2: The Application of Open Innovation in Practice
Beyond the definition, the board detailed the tangible activities and methods used to implement Open Innovation. These practices can be categorized into four key areas of application.
1. Ecosystem Building: Partnerships and Scouting
This is the most common application, focused on building and managing a vibrant innovation ecosystem.
- Activities: Actively “scouting, filtering, and making relevant introductions” between external partners (like startups and universities) and internal business units. The goal is to build a network that provides strategic insights and prepares future opportunities.
2. Strategic Investment: Venture and Incubation
Organizations are increasingly acting as investors to gain access to cutting-edge innovation.
- Activities: Making “venture investments in new companies,” funding smaller-scale “Proofs-of-Concept (POCs) for new projects” with minimal risk, and incubating promising internal projects and talent before spinning them out.
3. Internal Alignment: Strategy and Management
For external efforts to succeed, internal work is critical. Board members stressed that effective Open Innovation requires the “hard work of identifying internal problems/needs.”
- Activities: Embedding Open Innovation directly into the corporate strategy. This requires clearly defining internal challenges that are suitable for external solutions. As one group noted, a key success factor is “building consensus and confidence in open innovation activities internally.”
4. Engagement Platforms: Events and Programs
These activities create structured opportunities for collaboration and knowledge exchange.
- Activities: Organizing innovation campaigns, hosting events like a “Demo Day in university partnership,” and using crowdsourcing or a “global request-for-information” to solicit solutions. Other simple but effective methods include inviting “stakeholders/guests for projects/talks/meetings to create new spaces.”
Conclusion
The board’s discussion makes it clear that Open Innovation is a dynamic and essential discipline for modern enterprises. It is a strategic commitment to looking beyond internal capabilities to solve problems, create value, and drive growth. A successful Open Innovation program is not built on a single activity, but on a balanced portfolio of practices that includes ecosystem building, strategic investment, rigorous internal alignment, and active community engagement.
About the Open Innovation Labs: The Open Innovation Labs at the UC Berkeley Haas School of Business serve as a hub for research, education, and industry collaboration, dedicated to advancing the theory and practice of open innovation.