The number of open innovation challenges in pharma grows by the day. But what’s driving them? That’s what Luminary Labs wanted to know. So the consultancy, which works with pharma and other industries to design and execute those kind of challenges, surveyed the executives at companies that run the contests and asked why and how they do it.
The research showed that open innovation is an emerging practice across industries—think digital groups inside companies 20 years ago—with companies running them for myriad reasons. Some are trying to stimulate development of new solutions and generate ideas and concepts, while others are looking to identify potential partners and investments and position their organizations as innovators. In fact, 71% had four or more goals in running challenges. As noted in the report: "Open innovation can help a consumer products company crowdsource new toothpaste flavors, or help NASA design systems to support human life on Mars—or anything in between."
In healthcare and pharma specifically, many companies run both internal and external challenges, something Luminary Labs CEO Sara Holoubek noted was “quite novel” among industries. She said it might have something to do with the current state of the industry and the search for new business models and new ways of working. Johnson & Johnson, Astellas and Merck are some of the pharma companies that have adopted innovation challenges.
Among the pharma and healthcare companies Luminary surveyed, 77% are working to develop competency around open innovation programs, the research found. Pharma and healthcare use open innovation most often to stimulate concept generation (68%), position the company as innovative (64%) and develop new solutions (64%).
“As their efforts move over to the commercial side and become more visible, it becomes an opportunity to not just engage with the community and identify talented partners, but to position the company and take a stand on what are you most interested in. It’s become more common for a pharmaceutical to say here are our investment theses, whether that’s a venture fund or for a particular therapeutic area that’s looking to go beyond the pill,” Holoubek said.
However, she did caution that in her experience open innovation used solely for PR rarely yields substance, and the focus of open innovation should be on moving beyond traditional means of solving problems.
Along with the 100 innovation executives surveyed, Luminary Labs also conducted in-depth interviews, including several with pharma and healthcare executives to garner additional insights and tips for others considering the practice.
Pfizer VP of global digital strategy, Annie Guzek, noted that it is important to make sure the work is defined and driven strategically. Open innovation is “always worth it when there is a desire to learn, a defined scope, proactively aligned measures of success, and an informed and knowledgeable base of senior leader support,” she said.
And Holoubek said her company's research indicated that this is just the beginning.
"Today we’re realizing that collaboration is the new competitive edge. When we see organizations start to create dedicated teams or create new titles such as head of open innovation or open innovation manager, it suggests to us that open innovation is here to stay. We just happen to be at the very early stages," she said.