Companies should include disruptive technology in their business models to add value, says Henry Chesbrough, author of the Open Innovation series.
Author Henry Chesbrough says Thailand must spend more on internal R&D to build a solid foundation for collaboration with universities and companies.
He said Thailand must spend more on internal R&D to build a solid foundation for collaboration with universities and companies to generate more revenue through innovative products and services with new business models.
"Thailand has adopted innovation for internal knowledge, but its expenditure on research and development is still low at 0.6% of the country's GDP, compared with 3% in Europe and North America and 4% in South Korea. The country still has a long way to go," said Prof Chesbrough, who is executive director of the Center for Open Innovation at the University of California, Berkeley.
Increased R&D spending will attract more foreign direct investment for collaboration, bringing more ideas and adding value to the country through utilisation of existing technologies, he said at the Science Technology Innovation Forum and Outstanding Technologist Awards 2017, hosted by the Thailand Management Association.
While Thailand is small, it has an advantageous geographical location that allows companies to connect, using supply chains in the US, Japan and China. These positive factors have helped the country to reach the global market, said Prof Chesbrough.
The rapid increase in high speed internet and network availability allows for more open innovation, compared with a decade ago, he said.
Open innovation is the use of inflows and outflows of knowledge to accelerate internal innovation and expand the markets for their external use. This helps businesses accelerate at a time when innovations reach market by collaborating with external companies and universities rather than focusing on close innovation that relies on internal R&D teams.
Previously, open innovation was limited to large companies, but it has increasingly spread out to various-sized players.
The internet enables businesses to build platforms connecting many companies at the same time, letting large firms work with small start-ups, he said, adding open innovation is not just the purview of the private sector, as it is also useful to governments and non-profit organisations.
"Companies will get much more sustainable value if they focus on innovative business models," said Prof Chesbrough. "I believe that large companies should develop and adopt lean startup methodologies to do rapid prototyping with potential customers at the very early stages of development to find viable business models."
He said open innovation can start from an outside-in or an inside-out model. Outside-in happens when external ideas and technologies are brought into the firm's own innovative process.
"Open innovation brings more utilisation and economies of scale," said Prof Chesbrough.