Which of the following statements about open innovation is true?Multiple choice question.The sharing of ideas and inventions from within the firm and from outside sources can go both ways.Ideas and inventions become the property of the firm funding the venture.It is time-consuming and often unsuccessful.External R&D always produces more interesting ideas than internal R&D.
Question
Which of the following statements about open innovation is true?Multiple choice question.The sharing of ideas and inventions from within the firm and from outside sources can go both ways.Ideas and inventions become the property of the firm funding the venture.It is time-consuming and often unsuccessful.External R&D always produces more interesting ideas than internal R&D.
Solution
The correct answer is: "The sharing of ideas and inventions from within the firm and from outside sources can go both ways."
Open innovation is a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as they look to advance their technology. The boundaries between a firm and its environment have become more permeable; innovations can easily transfer inward and outward. The central idea behind open innovation is that, in a world of widely distributed knowledge, companies cannot afford to rely entirely on their own research, but should instead buy or license processes or inventions (i.e., patents) from other companies. In addition, internal inventions not being used in a firm's business should be taken outside the company (e.g., through licensing, joint ventures, spin-offs).
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