Open innovation, or the development of new technologies through flexible networks, is an ideal fit for eco-innovative SMEs, especially because of the need to quickly internationalise new green technologies, according to BIC Innovation, a business support consultancy based in Bridgend, South Wales, United Kingdom.
Through open innovation, innovators share the risks and rewards of new technologies. Rather than developing ideas within a company and protecting them until they are ready for market, open innovators share from the outset. They thus get wide-ranging feedback, and can quickly improve their innovative technologies. The benefits from this outweigh the rewards that might arise from carefully guarding intellectual property.
Dafydd Davies, chief executive of BIC Innovation, argues that eco-innovative companies should not be too cautious about sharing. "I cannot think of any other sector that has seen continued global growth for 10 years," he says. If eco-innovators can internationalise quickly, they can ride the wave of demand for eco-innovations – a demand that is only likely to grow.
Even open innovation has to be planned, however. "It's about creating a routemap," Davies says. Companies should be clear about the partnerships they want, and should ensure they have tools for managing the flow of ideas, and access to finance so that ideas do not stall for lack of money.
BIC Innovation is an example of an advisory service that helps SMEs prepare for open innovation. “We want more companies to be international, to collaborate and to do R&D,” Davies says. Widespread adoption of such an approach, rather than the "old model" of companies developing proprietary technologies in their home markets, and then gradually expanding to new markets, is the key to the spread of eco-innovation, Davies argues.
An example of open innovation in action, Davies says, is Dulas, a commercial spin-out from the Centre for Alternative Energy, an energy education and demonstration centre in west Wales. Dulas is a consultancy that, because it has embraced open innovation, can offer services relating to all forms of renewable energy, rather than specialising in a specific energy, which is the case for most renewables companies.
Dulas qualifies as a medium-sized company – it has about 100 employees – but because of its flexible approach it has been able to operate globally. It has, for example, worked with organisations in countries such as Bangladesh, the Republic of Congo and Peru to provide renewable energy systems that pump clean water, or refrigerate vaccines and blood supplies. Because the greatest gains from eco-innovation are often to be found in the developing world, European SMEs should adopt internationally-focused open innovation as the foundation for success, Davies says.