Open vs closed innovation: How are they different?

Ana Vilar García

Open and closed innovation are both solid options if your company wishes to innovate. Each option has its pros and cons, and it is also possible to combine them. Learn what open and closed innovation are, and what suits you better: open vs closed innovation. 

What is open innovation?

Open innovation is a type or corporate innovation that is gaining popularity over time. One of the main characteristics of open innovation is its collaborative nature. This model isn’t enclosed in a given company, but taken outside in order to collaborate with different agents. Based on this idea, people from different sectors, perspectives and types of company can contribute to the innovation of a given company, and create new products, services or ideas altogether. 

When creativity and ideas are shared, intellectual property is shared as well. Normally, the consequences of this is the flow of new ideas, conversations and outcomes. 

There are many open innovation models out there: from hackathons to the union between large corporations and startups, among many others.

👉You can learn more about open innovation in the Corporate Lab Blog. 👈

Key features

  • Collaboration: Different types of companies and people involved
  • Flow of ideas, creativity and conversations
  • Shared intellectual property

What is closed innovation?

Closed innovation is a type of corporate innovation that takes place within a company and by using the company’s own resources, in terms of budget and human resources. It’s essence is the fact that it takes place inside the company. For instance, this can be an intrapreneurship model, an innovation department, or its own innovation lab.

Key features

  • Internal conception
  • The company’s own ideas
  • Private intellectual property

Open vs closed innovation: Which is right for your business?

Depending on the type of company and its goals, you can opt for one or another, or even to combine both. These are some criteria you can follow in order to decide which option suits you better: uniqueness, competitiveness, flow of ideas, expansion. 


If the objective of your company is to produce a unique product or service, closed innovation is a better option for you. When intellectual property or a patent is required, you will need to develop this idea internally.


Oftentimes, innovation is used as a tool to improve existing products or services - this is called incremental innovation. If your company exists in a very competitive market, internal innovation may be a better idea. Working internally in improving features can be an advantage and you might end up surprising your competitors. 

Flow of ideas

If your company’s goal is to introduce innovation and start exploring new paths, open innovation is for you. Collaborating with others is the ideal tool to start exploring innovation. Plus, creativity is contagious, and your team will experience a change in their way of working and thinking.


When expansion is the will, partnerships are the way. Teaming up with others can help you gain new audiences and reach new markets, hence leading to expansion. 

Giving back to the community (and getting some yourself)

Collaborating with startups, for instance, is a way of involving your company in the entrepreneurial community. This is one of the preferred types of open innovation, because both parties can get a lot of benefits from this union.

If you’re not sure what path to follow, at Corporate Lab we can lend you a helping hand. We’re experts on identifying new business opportunities and turning them into scalable and profitable new startups. Leave us a message and let’s discuss what’s the ideal type of innovation for your business. 

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