NRI Papers
No.115 March 1 , 2007
  Company Management in the Era of Web 2.0
— Knowledge communities facilitate open innovation —
Taiichi INOUE
   From around the middle of 2005, the term Web 2.0 has been a major topic gathering increased attention. The concept behind this designation implies a shift from the spreading period of the Internet in the 1990s to a second generation. The essence of this shift features a stronger implication of the web as the "venue" for information exchange chiefly among many and unspecified individuals (N-to-N communication).
   Companies that are paying increased attention to N-to-N communication based on Web 2.0 consist of those that have developed web technologies and those that have provided the "venue." A wide variety of knowledge communities relying on N-to-N communication has begun to emerge on the "other side of the Net." They are being used not only by individuals but also by companies.
   The utilization of Web 2.0 by companies facilitates "open innovation that uses knowledge communities on the other side of the Net as important resources." In view of the limits facing a company relying entirely on in-house resources to address all the issues it must resolve, open innovation leverages internal and external knowledge and ideas to accelerate technological innovation.
   To use knowledge on the other side of the Net, in some cases, many unspecified users might be targeted. However, a more practical means of achieving open innovation is the use of knowledge community intermediaries, which consist of consumer-driven sites and sites providing business partners.
   In 2003, Proctor & Gamble launched its open innovation strategy, the results of which have been quite successful. In the future, we will see increasingly diversified and higher quality knowledge communities. The time has come for many companies to adopt a serious approach to these communities by establishing internal systems appropriate for the use of such communities.
I Knowledge Communities Flourish in the Era of Web 2.0
II Knowledge Communities Facilitate Open Innovation
III Knowledge Community Intermediary Business Supports Open Innovation
IV Open Innovation as Part of Corporate Strategy
V Toward the Utilization of Knowledge Communities


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