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ONE SIMPLE IDEA
uct-than it is to start at square one in R&D and go through the whole long, complicated, and expensive process of coming up with and developing an idea themselves. So licensing our ideas is really just good business for companies. It reduces their R&D costs. It accelerates their product development time. And it creates a multiplying effect: essentially getting other people to develop ideas for them for free. This concept of companies licensing ideas from outside their own walls, otherwise known as open innovation, was unheard of when I first entered the licensing game. Twenty years ago, Procter & Gamble (P&G) would never have given me the time of day. Now, P&G-the largest consumer products company in the world-is among the vanguards of the open-innovation movement. Nine years ago, p&G set a goal of sourcing at least half of their new products from the outside. A few years later, they reached that goal. In 2009, more than 100 of the new products that p&G released came from outside ideas. As Jeff Weedman, a p&G vice president involved with the company's openinnovation strategy, has said: "We don't care where good ideas come from as long as they come to us." p&G is not alone. Today, the world's most enlightened corporations, including Black & Decker, Ford, Kraft Foods, Samsung Electronics, and thousands upon thousands of others, have opened their doors to outside innovators.
The Global Churn Innovation is driving the global economy. A hot new product comes out in the United States or the United Kingdom, in Japan or Germany, and thanks largely to the Internet, it's soon selling in all four corners of the world. No sooner does the latest product or process hit the market than someone somewhere is upping the ante: creating a new and improved spin-off; adapting it for new applications or for new demographic, geographic, or niche markets; making it better, fancier, simpler, cheaper, prettier, "greener," improving it in some beneficial and simple way.