Open Innovation Strategy: Open platform-based digital mapping; as tools for value creation and value capture : Case study of OpenStreetMap and Google Maps

Abstract: Open innovation has been rising in popularity as an alternative to traditional model for organizations to enhance innovation in their products or services. In the past, the innovation processes was time-consuming and costly. It has now become significantly efficient and effective, supported by the advancement of today’s IT such as Internet, Cloud Computing and Big Data. Open innovation has changed the aspect of the innovation source; from closed internal R&D to fully utilization of consumers’ collaboration. Decision to shift towards open innovation strategy has been lying on several areas including motivation, financial direction, and preference of the innovation strategies and business models that fitting the organizational core strategy. This research studied the relation of these areas and its effect; it determined the way IT-organization creates and captures value that were done by opening its product platform. This thesis was conducted to analyze the open innovation approach in an open digital navigation platform, featuring two platforms as case study: Google Maps and OpenStreetMap. The investigation emphasized the utilizing of the open innovation strategy to build its platform where crowdsourcing and open source software as objects highlighted in the research. The data was collected from secondary sources. Research findings suggested that crowdsourcing and open source software strategy are the main strategies of open innovation implemented in IT digital mapping platform to create and capture value. While these strategies have been practiced in both platforms, circumstances (motivation, financial direction, and business strategy) that hovering around the internal aspect of organizations affected the application of those strategies. The implementation results are differ according to preferred business model. The result of this research suggested that a non-profit based organization tends to utilize open innovation to improve the value of their product through consumer collaboration, while a profit based organization adopts open innovation to generate additional pool of revenue through customers’ feedback and input data. The open innovation leads to creation of a new business model as the foundation of innovation.