Open Innovation In Canadian Energy Companies

Open innovation refers to collaboration between industry competitors to increase overall research and development. In the energy sector in Canada, open innovation usually occurs through industry-based, non-profit innovation intermediaries or strategic bridging organizations. These companies provide a cost-effective approach to the outsourcing of corporate research and development, particularly in unconventional oil.

Many have not yet embraced the fact that the oil and gas sector is a high-tech industry. However, the oil and gas sector has been engaging in open innovation for the past 20 years. Researchers have shown that the sector finds it easier to employ open innovation techniques to address strictly non-competitive environmental issues rather than the competitive ones. Firms are also more likely to employ open innovation in what is referred to as pre-competitive, early-stage technologies than in the competitive production technologies in the energy sector.

The structure of the various companies in the sector also determines the success of the open innovation. Some will hesitate to share information freely due to a fear of losing their competitive advantage. In others, corporate leadership, innovation financing models, legal constraints, abilities of companies to absorb new technologies and the additional time required for open innovation versus single firm innovation will limit their level of collaborative prowess. Often, smaller companies simply do not have the resources to engage in collaboration and open innovation hence fails.

However, the situation has improved with the establishment of the intermediary organizations.  These high-profile organizations have been able to mobilize significant resources and senior executives to collaborate. Due to this, inter-firm collaboration can continue, even during tough economic times. Open innovation holds the key to an economic breakthrough in the oil and gas sector, so that it can respond to the environmental issues it faces today.

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