The Importance Of Closed And Open Innovation

1. Introduction
Nowadays, customers have very high demand on new products. A successful company should satisfy all customers’ demand and has correct prediction on future trends. Therefore, R&D plays a vital role on the success of a company. A successful company should have superior R&D performance over their competitors. Currently, companies have recognized the importance of R&D process and significantly invested on this process. However, there is no formula for the success of R&D performance. A R&D problem could be addressed by various ways. R&D performance is the final result of the mixing of many factors: R&D facilities, technological levels in organization, selected human resources, resources allocation, and others. Because of including

Closed and open innovation principles
Currently, there are two principles of innovation: closed and open innovation. Before 21st century, there was only closed innovation principle (Marques, 2014). However, the open innovation principle was first published on “Open Innovation” book by Henry Chesbrough in 2006 to adapt new business forms in 21st century (Marques,

The open innovation principle has broader definition than the old one. First, in contrast with closed innovation principle, the new innovative concept allows companies to find new R&D ideas from both external and internal sources. External R&D sources usually bring vital values that significantly contribute to overall R&D performance while internal R&D sources only support to external R&D sources. Therefore, companies do not need to have good controls on internal processes because corporation between R&D firms is much more important. A successful company knows how to equally balance the external and internal resources and has a best use on those resources. Moreover, introducing products to market first could not guarantee success anymore. Building a good business model such as Facebook, Apple, etc. is the crucial factor for sustainable