Application of open innovation paradigm in the railway companies

Abstract

The traditional closed model of innovation where the companies get their ideas from within the organization is slowly but surely being replaced by the open innovation model based on a premise that a company should diversify the ways it searches and brings new products to the market. However, there is lack of practical feasibility and applicability of the open innovation model in the particular industries. In the center of attention of this study is the railway industry, characterized by numerous challenges such as increased customer demand, growing competition, increased costs and relative inability to safeguard the economies of scale and scope. The question of solving these problems by introducing open innovation practices remains open. This study explores the cases of natural monopolies in the railway industry comparing the states-of-the-art in three countries: Germany, Russia, and the UK. Data is gathered from the semi-structured interviews with the representatives of RZD, Network Rail and Deutsche Bahn and is complemented with the information obtained from the documentations of the focus companies. Different approaches and levels of innovation development are put under investigation in order to identify the main trends, best practices and the development potential of open innovation. The outcome of this study is a list of key trends and strategies of open innovation in the railway industry, as well as a list of recommendations for adapting the best practices to an organizational reality.