While IBM, year after year, is awarded more patents than any other company, it has also become a huge proponent of the red-hot concept of open innovation that allows R&D to scale up and out across organizational boundaries. The concept has also caught on in big ways at GE, HP, Eli Lilly, USC, and Memorial Sloan-Kettering Cancer Center.From the New York Times:

So, in the Internet era, what is the continuing role and comparative advantage of the corporate R.& D. lab?

More Global CIO Insights

White Papers

• Creating the Enterprise-Class Tablet Environment - by Yankee Group
• The BlackBerry PlayBook tablet's Good Bones - by BlackBerry

More >>

Reports

• Research: Outlook 2012
• SaaS 2011: Adoption Soars, Yet Deployment Concerns Linger

More >>

Webcasts

• Maximize ROI with Database Consolidation onto Private Clouds
• Outsourcing Security: What Every Potential Cloud Security Customer Should Know

More >>

Its role will be smaller and its advantage diminished, suggests Michael Schrage, a research fellow at the Center for Digital Business at the Sloan School of Management at M.I.T. The idea-production process, according to Mr. Schrage, will continue to shift away from the centralized model epitomized by large corporate labs, going from "proprietary innovation to populist innovation."

Much of traditional corporate R.& D. spending, he said, has been subsidized by profits that are increasingly under Internet-era pressures. "The economic case for a lot of in-house R.& D. no longer makes sense," Mr. Schrage said.

Last year, IBM was awarded 4,186 patents, which for the 16th straight year gave IBM the distinction of receiving more patents than any other company in the world. As we wrote about that achievement two months ago, "That's more than 11 patents granted every single day for the entire year - and also marks the first time any organization has been awarded more than 4,000 patents in a single year."

Yet in spite - or because? - of that massive commitment to internal R&D, the company has become a huge proponent of the open-innovation model as well, according to the Times article:

Jolted by its early-1990s tailspin, I.B.M. opened its labs to the outside world and to customers. Since the mid-'90s, it has sharply shifted its research focus toward its growth engines of software and services. I.B.M. is a major underwriter of open research in universities….

The open innovation model, says John E. Kelly, senior vice president and director of research, has many advantages. But he points to several innovations that became products after originating in I.B.M. labs. "You can't leave discovery completely to others and to chance," he said.