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In 2013, US manufacturer General Electric (GE) had an opportunity. They wanted to make lighter jet engine components that were safe, strong and cost effective. They had an instinct that 3D printing might help but they wanted to test a number of product applications. so they focused their study on smaller parts. Dyan Finkhousen, then-Director of Open Innovation and Advanced Manufacturing at GE says, 'We worked with the team to focus the open innovation study on a product component.' What they singled out was an engine bracket.

GE then teamed up with GrabCad, an online community of engineers and designers, to present a challenge: whomever could redesign the bracket to make it lighter and function as efficiently as a heavier version would win $7000. They received nearly 700 entries from 56 countries.

The winner was Indonesian M Arie Kurniawan, who designed a bracket that was nearly 84 per cent lighter than the existing version, far surpassing the original goal of making something 30 per cent lighter.

Steve Liguori, then GE's Executive Director of Global Innovation and New Models said, 'I’ll never forget the day we presented this to Jeff Immelt [GE’s past chairman and CEO]; he was like, 'Where did you find this kid, and how much aviation experience does he have?' And you know the answer to that question? Zero'.

Of course, crowdsourcing, challenge prizes, and the gig economy are not ‘new’ ways of supporting and managing innovation, even in 2013. Yet the bracket challenge is an interesting example of the beginnings of micro-open innovation, where innovation processes and problems are divided into smaller parts that can be seamlessly tackled through digital innovation brokerage tools and micro-jobbing platforms.

How is micro-open innovation being used as an innovation method?

The value of micro-open innovation

The success of micro-open innovation at GE helped inspire similar initiatives at NASA starting in 2015.[1] A recent example is a video made for the RFID-Enabled Autonomous Logistics Management (REALM) project team, which was finding it difficult to communicate its purpose. Steve Rader, Deputy Director for NASA’s Centre for Excellence for Collaborative Innovation, says, 'We produced this video for $4500 and it would easily have cost us $100,000 to do any other way.' The video was created through two challenges: one offered $1500 for a storyboard and the other $3500 for production.

The impact of micro-open innovation at NASA has been well documented. Firstly, it reduces costs: in 2018, total savings across all challenges were estimated to be more than $320,000 when compared to traditional methods.

Secondly, it saves time: in Rader’s words: 'the speed is amazing'. 'I got the call in the morning, had the challenge launched by noon and three days later had 45 graphic designs to choose from. And that was probably for $250.'

Thirdly, there are high quality results: 'NASA rated that 97 per cent of all challenges would be implemented by NASA; 69 per cent are already in use and 29 per cent will be planned for future implementation'. While these statistics only provide insights into the implementation of micro-innovation within one organisation, they still make for a compelling case study.

Making things smaller fundamentally changes who gets involved and the way in which the technique is used. For instance, small tasks allow and encourage the participation of individuals who might not otherwise have the resources to tackle larger challenges.

What makes micro-open innovation distinct?

Like conventional crowdsourcing and challenge prizes, micro-open innovation allows organisations to access outside expertise. What makes the method different, however, is that making things smaller fundamentally changes who gets involved and the way in which the technique is used. For instance, small tasks allow and encourage the participation of individuals who might not otherwise have the resources to tackle larger challenges.

While substantial savings can be made with these methods, it’s not only about the money. Micro-challenges and tasks let people build skills, prestige and a portfolio of work that might open doors to future employment – whether as freelancers or in full-time roles. A small contest can also be used as a way of screening innovators for larger, more complex tasks.

'A contest can help find a freelancer… sometimes you’re not looking for a great idea but an innovator who understands your particular domain,' says Rader. This is another way in which micro-open innovation is distinct from larger challenge prizes which innovators are unlikely to use simply for screening because of the cost.

Micro-open innovation can also be used as a way to draw on external skills without giving away confidential information, as only certain things need to be disclosed while the project as a whole can remain obscure.

As Finkhousen explained, 'If we are working on a proprietary innovation mission, we have to be very thoughtful about the innovation design so that we don't disclose proprietary information or signal to the competition'. Breaking innovation problems down into their component parts means that individual open innovation challenges can be made sufficiently abstract to ensure that sensitive information won’t be disclosed.

The low risk nature of this method also means it can also be used as a stepping stone into the wider world of open innovation, as a NASA paper put it last year: 'Micro-purchases could become a compelling entry-point for organizations who are willing to experiment and subsequently build a convincing business case to present to stakeholders'. Other benefits include making managers more rigorously identify project requirements, allowing organisations to learn from external experts, plus greater flexibility.

It is the growth of more traditional open innovation, challenges, and crowdsourcing that has allowed the emergence of micro-open innovation. Sophisticated digital platforms make it easy for smaller tasks and challenges to be posted and for there to be enough users to deliver them. Of particular value are new digital innovation brokerage tools that connect ideas, people, organisations and communities to enable and support the innovation process; these are the subject of a forthcoming Nesta report.

Breaking innovation problems down into their component parts means that individual open innovation challenges can be made sufficiently abstract to ensure that sensitive information won’t be disclosed.

Limitations of micro-open innovation

Widespread adoption of micro-open innovation could be hard to achieve. NASA’s own analysis of these tools said: 'History tells us that inspiring mass organizational change is hard because implementing innovative technology is more than just a 'plug and play.'[2]

The space agency in particular has benefited from being able to leverage its well-known brand to drum up interest in its challenges, but there is some evidence that this enthusiasm wanes over time. For some organisations, such as GE, the of use of micro-open innovation can mean stepping out of a highly honed, efficient industrial process, and that can come with transaction costs.[3]

Micro-open innovation also potentially puts highly skilled innovation jobs in a similar position to those that require less skill, like taxi drivers. Platforms like Mechanical Turk and TaskRabbit already often post lower-skilled work, but micro-open innovation harnesses these techniques for more complex tasks that form part of the innovation process. So should innovators be worried about their future employment and that business risks could be pushed toward workers?

As with many of the new digital innovation methods identified in this scan, advocates of the techniques see them as tools rather than replacements for people. As Steve Rader says, 'We’re not trying to outsource your job. We’re trying to get you ideas that you can then build on to make your designs better.'

As with many of the new digital innovation methods identified in this scan, advocates of the techniques see them as tools rather than replacements for people.

The future

According to Finkhousen, the future of micro-open innovation is headed towards increased digitisation and integration, since the current system still has too many analogue steps and transitions between parts of the process slows things down. 'We have to press the pause button a little bit too much.' Greater digitisation could help streamline the whole process. This might be achieved with the help of companies like Fulcrum that use software to make workflow more efficient. Another digital opportunity is the use of AI that could, for example, help identify the right expertise such as by actively searching freelancer platforms, experts and published solutions.

More seamless (digital) integration of micro-open innovation and collective intelligence platforms may also lead to these becoming much more widely used in all manner of desk jobs. Steve Rader imagines that, 'in addition to doing a Google search or text search you’d run these challenges to pull in the next idea'. Staff might have budgets to run contests independently so that they innovate in a manner that is integrated with their day-to-day work.

The potential of these techniques has not gone unnoticed. In a recent article for the Wall Street journal, two senior staffers from consultancy Deloitte noted that, 'Alphabet’s former executive chairman, Eric Schmidt, has predicted that the next $100 billion company will likely result from the wisdom of the many'.

[1] NASA issued a famous astronauts glove challenge in 2007 which was for a small object but with a big prize, $200,000 so would not be classified as micro-open innovation.

[2] Tang S, Rader S and Philips P (2018). Surprising results from large crowds using Micro-Purchase Challenges - using contests on freelancing communities to source innovative, impactful and cost-effective solutions.