InnoCentive
Encyclopedia
InnoCentive is an "open innovation
Open Innovation
Although the idea and discussion about some consequences date back at least to the 60s, open innovation is a term promoted by Henry Chesbrough, a professor and executive director at the Center for Open Innovation at the University of California, Berkeley, in his book Open Innovation: The new...

" company that takes research and development
Research and development
The phrase research and development , according to the Organization for Economic Co-operation and Development, refers to "creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of man, culture and society, and the use of this stock of...

 problems in a broad range of domains such as engineering
Engineering
Engineering is the discipline, art, skill and profession of acquiring and applying scientific, mathematical, economic, social, and practical knowledge, in order to design and build structures, machines, devices, systems, materials and processes that safely realize improvements to the lives of...

, computer science
Computer science
Computer science or computing science is the study of the theoretical foundations of information and computation and of practical techniques for their implementation and application in computer systems...

, math, chemistry
Chemistry
Chemistry is the science of matter, especially its chemical reactions, but also its composition, structure and properties. Chemistry is concerned with atoms and their interactions with other atoms, and particularly with the properties of chemical bonds....

, life sciences
Life sciences
The life sciences comprise the fields of science that involve the scientific study of living organisms, like plants, animals, and human beings. While biology remains the centerpiece of the life sciences, technological advances in molecular biology and biotechnology have led to a burgeoning of...

, physical sciences and business
Business
A business is an organization engaged in the trade of goods, services, or both to consumers. Businesses are predominant in capitalist economies, where most of them are privately owned and administered to earn profit to increase the wealth of their owners. Businesses may also be not-for-profit...

 and frames them as "challenge problems" for anyone to solve them. It gives cash awards for the best solutions to solvers who meet the challenge criteria.

History

The idea for InnoCentive came to Alpheus Bingham and Aaron Schacht in 1998 while they worked together at Eli Lilly and Company
Eli Lilly and Company
Eli Lilly and Company is a global pharmaceutical company. Eli Lilly's global headquarters is located in Indianapolis, Indiana, in the United States...

. They brainstormed the idea for Innocentive (what they originally dubbed "Bounty Chem") during a session that was focused on exploring application of the Internet to business. The company was launched in 2001 by Jill Panetta, Jeff Hensley, Darren Carroll and Alpheus Bingham, with majority seed funding from Eli Lilly and Company
Eli Lilly and Company
Eli Lilly and Company is a global pharmaceutical company. Eli Lilly's global headquarters is located in Indianapolis, Indiana, in the United States...

. Darren Carroll led the launch effort and became the first CEO.

In 2005, InnoCentive was spun out of Eli Lilly with investments led by Spencer Trask of New York. In December 2006, shortly after current president and CEO Dwayne Spradlin took the helm, the company signed an agreement with the Rockefeller Foundation to add a nonprofit area designed to generate science and technology solutions to pressing problems in the developing world.

In 2006, Prize4Life partnered with InnoCentive to launch the $1 million ALS Biomarker Prize, which was a Grand Challenge designed to find a biomarker to measure the progression of ALS – also known as Lou Gehrig’s disease – in patients. In February 2011, the $1 million prize was awarded to Dr. Seward Rutkove for his creation and validation of a clinically viable biomarker. In early 2011, InnoCentive launched four more Grand Challenges on behalf of Life Technologies.

Company

Today, InnoCentive is a privately-held, venture-backed firm that has experienced consistent year-over-year growth. Based just outside of Boston, Massachusetts, the company has posted more than 1,300 Challenges to its Global Solver Community, in addition to hundreds of internal Challenges – those targeted at private communities such as employees – executed by customers using InnoCentive’s Challenge Platform. InnoCentive currently enables Challenges in a wide variety of disciplines, including Business and Entrepreneurship, Chemistry, Computer/Information Technology, Engineering and Design, Food and Agriculture, Life Sciences, Math and Statistics, and Physical Sciences.

InnoCentive’s Solver community now consists of nearly a quarter-million creative and talented individuals from more than 200 countries, with an added reach of 12+ million through strategic partnerships with organizations including The Economist, Nature Publishing Group, and Popular Science.

InnoCentive's customers include commercial, government and non-profit organizations, from Procter & Gamble
Procter & Gamble
Procter & Gamble is a Fortune 500 American multinational corporation headquartered in downtown Cincinnati, Ohio and manufactures a wide range of consumer goods....

, Dow AgroSciences
Dow AgroSciences
Dow AgroSciences LLC is a wholly owned subsidiary of the Dow Chemical Company specializing in not only agricultural chemicals such as pesticides, but also seeds and biotechnology solutions. The company is based in Indianapolis, Indiana, in the United States...

 and Eli Lilly and Company
Eli Lilly and Company
Eli Lilly and Company is a global pharmaceutical company. Eli Lilly's global headquarters is located in Indianapolis, Indiana, in the United States...

 to the Air Force Research Lab, NASA and the Rockefeller Foundation. More than 1300 "challenges" have been posted in 40 disciplines, including chemistry, life sciences, business and entrepreneurship, computer science and clean technology.

Solutions have come from United States, Europe, Russia, China, India and Argentina; the cash awards for solving challenge problems are typically in the $10,000 to $100,000 range. To date, over $28 million has been awarded to solvers.

InnoCentive provides a consultancy service to give its clients the highest likelihood of finding solutions to their problems. Client Services professionals help clients identify a challenge appropriate for posting on its network. They then estimate an appropriate award fee by determining the complexity of the problem, the resources required to find a solution, and the value transferred to the company. InnoCentive reserves the right to reject the award amounts that are deemed too low and its experts provide a solution vetting service to screen out ideas that do not meet the challenge criteria.

InnoCentive's "Seeker" companies must agree to intellectual property
Intellectual property
Intellectual property is a term referring to a number of distinct types of creations of the mind for which a set of exclusive rights are recognized—and the corresponding fields of law...

audits so that once a solution is provided to the company it can guarantee that the intellectual property is not used if the company decides not to award it.

InnoCentive also provides a consultancy service to its network of "solvers". Its team of PhDs provide feedback to the solvers to explain the terms of the challenges as well as why submitted solutions may be deficient. It provides the logistic and legal framework for maintaining control over the intellectual property until its sale to the seeker company. All communication and submitted solutions remain confidential.

Concept Model

For companies that heavily rely on R&D to compete on their markets (highly vertical models), resources tend to be very expensive and limited. Open Innovation suggests that valuable ideas come from both inside and outside of companies (Chesbrough, 2006). And it is also assumed that useful knowledge is widely distributed in markets and around the world. In this sense, InnoCentive has been creating and capturing value to the "seekers" and "solvers" by enabling the exchange of monetary rewards for external expertise.
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