Open innovation vs co-creation vs crowdsourcing: which, when

Choose crowdsourcing when you need many answers from many people to a well-defined question and can judge them yourself. Choose co-creation when the people who will use a solution need to shape it with you, in sessions, over time. Choose open innovation when the question is strategic: you want to bring outside knowledge, technology or partners into how you innovate as a whole, not just for one problem. The three overlap, and the best programmes mix them, but confusing them produces the familiar failures: an idea portal flooded with suggestions nobody reads, or a "co-creation" workshop where users are only asked to vote.

This article compares the three. For the wider topic of organisations solving shared problems together, see Ecosystem innovation.

Where the terms come from

The terms have clear origins, and knowing them helps you use each correctly.

• Open innovation was named by Henry Chesbrough in his 2003 book Open Innovation. His argument: organisations should use external ideas and paths to market as deliberately as internal ones, and let internal ideas they will not use flow out to others. It is a stance on the whole innovation system, not a single technique.
• Co-creation, in the business sense, was popularised by C.K. Prahalad and Venkat Ramaswamy, notably in their 2004 book The Future of Competition: Co-Creating Unique Value with Customers. Their point was that value is increasingly created with customers, not just delivered to them. In service design the word is used more broadly for designing with users and staff rather than for them.
• Crowdsourcing was coined by Jeff Howe in a 2006 Wired article, "The Rise of Crowdsourcing", to describe handing a task once done by employees to a large, undefined group through an open call.

The comparison

When crowdsourcing fits

Use it when the question is well defined, the answer could come from anyone, and you can evaluate many submissions fairly.

• You need many ideas fast: "How might we cut paper use across our branches?"
• You suspect the answer exists somewhere outside your usual network.
• You can describe the problem without insider knowledge.
• You have the capacity to read, sort and respond to every submission.

What to do: write a sharp how might we question, publish the criteria before submissions open, and plan the evaluation. Affinity grouping helps you cluster hundreds of ideas; a weighted decision matrix helps you shortlist. Most importantly, reply to people. An internal idea campaign that never answers its contributors teaches staff not to try again.

When co-creation fits

Use it when the people affected know things you cannot learn any other way, and when a solution will only work if they own it.

• Redesigning a service with the people who use it and the staff who deliver it.
• Shaping a policy that changes how people work.
• Any situation where acceptance matters as much as the idea.

What to do: choose participants deliberately using a stakeholder map and personas, so the room represents the real range of users. Use structured formats such as a design studio so that participants generate and critique, not just react. Test with them, too, and capture what they say with a feedback capture grid. Tell participants how their input changed the result. If it did not change anything, it was consultation, not co-creation.

When open innovation fits

Use it when you are deciding how your organisation innovates, not just how it solves one problem.

• Your internal R&D or innovation team cannot cover every field you depend on.
• You want a standing way to work with startups, universities or other entities.
• You have ideas or technology you will not use that could create value elsewhere.

What to do: decide which problems you will open and which you will keep internal; set up the routes in, such as challenge programmes, research partnerships or startup pilots; and fix the internal paths that let outside work be adopted, like procurement and IP. See Working with startups and Partnering with universities for the two most common routes.

Mixing them

In practice, the three often sit in one programme. A common sequence:

1. Open innovation sets the strategy. Leadership decides that, for a few priority problems, the organisation will look outside.
2. Crowdsourcing widens the funnel. An open call collects ideas and solutions, from staff, the public or startups.
3. Co-creation deepens the best ones. Shortlisted contributors work with users and staff to shape the idea into something that fits.
4. Open innovation returns for the deal. A partnership, pilot or licence turns the result into something that runs.

The mistake is to stop after step two. An open call without a co-creation stage tends to pick ideas that sound good rather than ones that fit.

Common mistakes

Do

• Name the model you are using, and tell participants what it means for them.
• Match the depth of participation to the question.
• Publish rules, criteria and IP terms before you open a call.
• Close the loop: tell every contributor what happened to their idea.

Don't

• Don't call it co-creation when users only vote or comment.
• Don't run an open call without the capacity to evaluate what arrives.
• Don't sign open innovation partnerships with no specific problem attached.
• Don't let the loudest crowd contributor or the most senior workshop participant decide alone.
• Don't measure success by the number of ideas or participants; measure what was adopted.

Illustrative example

Illustrative. A national library service in a European country wanted to make its branches more useful to young adults. It mixed all three approaches.

Leadership first agreed that this was a problem worth opening up, and that the library would work with outside partners rather than design alone: an open innovation decision. It then ran a public call asking, "How might we make a library branch the place young adults choose to spend an evening?" Several hundred ideas arrived; staff grouped them into themes and shortlisted eight against published criteria.

The library then invited the eight contributors, a group of young adults chosen to reflect different neighbourhoods, and branch staff to three co-creation sessions. The ideas changed a great deal: a proposal for late opening became a proposal for evening hours run partly by local groups, because staff explained the security costs and young adults said they wanted somewhere to meet, not just to study.

Finally, two ideas moved into pilots with outside partners: a local arts organisation and a university's youth research team, under short partnership agreements.

Questions people ask

Is crowdsourcing a type of open innovation? It is often treated as one of its tools. Open innovation is the broader stance of using outside knowledge; crowdsourcing is one way of reaching it, through an open call to many people.

What is the difference between co-creation and co-design? They are used almost interchangeably. Some practitioners use co-design for the design stage specifically and co-creation for the wider process, including delivery. What matters more is that participants genuinely shape the result.

Can we crowdsource ideas from our own employees? Yes. Internal idea campaigns are a common form of crowdsourcing. They work best with a narrow question, a published way of judging ideas, and a promise to reply to every contributor, kept.

Where to go next

Frame your question with how might we, choose participants with a stakeholder map, and run co-creation sessions with a design studio. For the bigger picture, read Ecosystem innovation; for open calls built around one sector, see How ministries and regulators convene a sector around one challenge.