Contrasting Open Innovation: Markets vs. Communities PPT

This PPT slide, part of the 31-slide Platform Business Models PowerPoint presentation, outlines the contrasting dynamics between competitive markets and collaborative communities within the context of open innovation. The left side details characteristics of competitive markets. Here, external innovators contribute variations of components that are interchangeable, emphasizing a formal governance structure that relies on strict, rule-based relationships. The focus is on profit, with external innovators often engaged in competitive interactions. Value capture for platform owners is achieved through direct contracts and licensing agreements with these innovators.

On the right side, the slide shifts to collaborative communities. It highlights a more informal governance style, where contributions from external innovators can vary from simple component offerings to co-production efforts. Relationships among innovators are cooperative, fostering technology sharing and deliberate spillovers. This environment encourages a blend of motivations—both intrinsic and extrinsic—that drive innovation activities. Notably, value capture in this model may not be direct; instead, it is linked to increased demand for the platform resulting from the innovations contributed by the community.

Examples provided reinforce these concepts. Competitive markets are illustrated with references to Nintendo Wii and the Apple App Store, where third-party developers are incentivized to create competing products. In contrast, open-source software communities like Linux and Ethereum exemplify collaborative communities, showcasing how shared innovation can thrive in less formal structures. This slide effectively delineates the strategic choices organizations face when considering their approach to open innovation.

This slide is part of the Platform Business Models PowerPoint presentation.

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