Co-innovation is a time-limited joint effort in which a few firms, each holding a capability the others lack, build a missing part of a solution together. They define the result in the customer’s terms and share the outcome.
Table of Contents
Key factors
- A missing part. Co-innovation fits when the customer outcome is clear but an essential piece does not yet exist, and no single firm would fund it alone.
- Co-innovation risk. An offer can fail even when the lead firm does its part, because each partner must also deliver its own innovation.
- Building and testing together. Joint tests with real users remove guesswork about how the parts fit, and show each partner its payoff.
- A clear end point. The effort works best when it stops once a working solution is documented. Normal ecosystem governance then takes over.
- Measures of progress. Time to first demonstration and follow-on adoption show whether the joint work is becoming a usable solution.
Examples
SSAB. In 2016 the Swedish steelmaker SSAB, the iron ore miner LKAB and the energy firm Vattenfall set up HYBRIT. The joint venture aimed to make steel with hydrogen in place of coal. Each brought a capability the others lacked: ore and pellets, steelmaking, and fossil-free electricity for hydrogen. In August 2021 SSAB delivered the first trial batch of hydrogen-reduced steel to Volvo Group for prototype vehicles. None of the three had the process before.
Safran. Safran and GE Aerospace are equal partners in the engine maker CFM International. In June 2021 they launched RISE, a programme to develop an open fan engine using more than 20% less fuel than today’s engines. In July 2022 CFM agreed to flight-test the design on an A380 testbed later in the decade. Each partner brings engine know-how the other lacks, and progress is tracked through ground and flight tests.
Frequently asked questions
How is co-innovation different from ecosystem coordination?
Coordination aligns parts that already exist so they work as one service. Co-innovation creates a part that does not yet exist, then hands it over to normal coordination once it works.
What is co-innovation risk?
It is the chance that an offer fails because partners do not deliver their own innovations in time, even when the lead firm executes well. The term comes from Ron Adner’s work on innovation ecosystems.
Is co-innovation the same as open innovation?
No. Open innovation is any use of outside ideas or outside routes to market, including licensing and crowdsourcing. Co-innovation is narrower: a few firms build one missing piece together and share the outcome.
When should a platform offer self-service tools instead of co-innovation?
When the category is high in volume, low in complexity and already has standards. Hands-on co-innovation suits early, regulated or complex markets, where partners need joint roadmaps, shared assets and staffed support.