During a recent chat with a friend who works for a multinational company, I stumbled upon a fascinating story. His company, it seems, has teamed up with a local startup to develop a health and exercise monitoring product powered by artificial intelligence.

But here’s the kicker. The research and development team doesn’t comprise just seasoned professionals. Two high school students were part of the design team for the product. Yes, you heard that right — teenagers!

This unexpected collaboration got me thinking about a concept that’s been buzzing around, especially here in Shanghai. It’s called “open innovation,” and it flips traditional thinking on its head by encouraging a diverse array of participants — from large companies and research institutions to startups and even individual entrepreneurs — to come together and innovate.

The beauty of open innovation lies in its flexibility. In no-holds-barred environments, varied participants all work toward solving real-world problems by pooling their unique strengths and resources.

At the heart of open innovation is trust and long-term collaboration. When companies open their doors to new ideas and perspectives, they often find better, more market-aligned solutions. It’s about more than just thinking outside the box — it’s about tossing the box out entirely.

New age of corporate innovation

Let’s dive into what open innovation means for companies today, starting with the transformation of underlying business thinking.

In the not-so-distant past, companies thrived on keeping their innovations proprietary to maintain a competitive edge and secure market share. The mindset was very much: “I have what you don’t.”

But times have changed. The company-centric model is becoming increasingly unsustainable, particularly in complex and large industries like manufacturing, chemicals, consumer goods and health care.

Today, success is increasingly defined by collaboration. Companies must cooperate within their industry or ecosystem to drive meaningful creativity. Take, for instance, the new-energy vehicle industry. A company might want to make its electric vehicles more environmentally friendly and increase battery range. To achieve that, it can’t operate in a vacuum; it needs to collaborate closely with material suppliers, environmental design firms and battery technology experts.

In this new landscape, these partners are not just outside vendors, they’re co-creators. This shift is crucial. Without it, companies risk falling behind as their products struggle to keep pace with rapidly evolving markets.

A second dimension of this transformation is how companies cultivate innovation.

Traditionally, corporate creativity was a ground-up process. Solutions were developed from scratch to meet new demands or to create markets where none existed. But today’s inventive landscape is far more interconnected.

Companies are increasingly recognizing the value of external resources and collaboration. Instead of starting from zero, they might license existing technologies or acquire new business lines and then build on them. This strategy allows them to leverage their own networks and expertise to better commercialize products.

For example, companies are setting up programs to identify and nurture promising startups that align with their business goals. The case I mentioned earlier — where a company integrates high school students into its R&D team — is an innovative twist on this approach.

By establishing internal entrepreneurial teams and combining them with external resources, companies can innovate on a budget while targeting specific outcomes. And with the rise of internal venture capital funds, these projects have the potential to scale up quickly. Some internal teams might even spin off into independent companies, driving further innovation within the ecosystem.

A third dimension of the changes afoot is talent cultivation. Traditional models focused on in-house teams, with companies investing heavily in internal research and development. This approach allowed companies to build on their legacy knowledge while fostering cross-functional collaboration. But as the innovation landscape evolves, so too must the way companies develop talent.

First, there is a push towards more diversified training for internal teams. My friends in product research and development at various multinational companies are not just attending training sessions within their own organizations. They are also participating in global exchange programs, learning from partner companies and forming core learning groups that customize their development paths. This cross-pollination of ideas and skills is crucial for staying ahead in today’s fast-paced market.

Second, in the context of open innovation projects, companies are adopting tailor-made talent models. They are recruiting individuals with foundational knowledge in specific fields and then providing intensive, hands-on training to develop them further. This “learning by doing” approach not only enhances the skills of the recruits but also integrates them more effectively into the company.

Moreover, companies are increasingly tapping the potential of young talent — sometimes even before that talent has entered the workforce. By partnering with universities and high schools, companies are identifying the best and brightest minds and inviting them to join specific project teams or earmarking them as future hires. In some cases, these young aspirants are even encouraged to start their own ventures, with the company as a potential partner or investor down the line.

More than a buzzword

Open innovation isn’t just a trendy phrase; it’s a strategic necessity in today’s uncertain economic environment.

For established companies, it’s a way to remain agile and responsive to market changes. For startups and individuals, it’s an opportunity to access resources and funding that were previously out of reach. And for government agencies, fostering an ecosystem that encourages such collaboration is key to driving economic growth and innovation.

Governments can play a crucial role by streamlining regulations, reducing red tape and facilitating the commercialization of creative new products. This not only helps new ideas reach the market faster but also creates a positive feedback loop that benefits the entire ecosystem.

As for me, I am eagerly awaiting the chance to try out the health-monitoring product designed by teenagers. It may not be perfect, but it’s bound to be brimming with energy and fresh ideas. After all, innovation is all about youth and vitality, and who better to embody that spirit than the young pioneers of tomorrow?

In a world where the only constant is change, it’s the open-minded, the collaborative and the bold who will lead us into a future full of infinite possibilities.

The author, formerly with Shanghai Daily, is an adjunct research fellow at the Center for Global Public Opinion of China, Shanghai International Studies University, and founding partner of 3am Consulting, a specialist in global communications.