Open Innovation Pushes Science and Technology to New Levels

The oil and gas industry has consistently worked to develop technology that delivers increased efficiency, productivity, safety, and profitability.  Historically, much of this development has occurred as internal efforts with staff scientists and engineers or as external collaboration with partners from their existing networks of technology suppliers, development partners, and service companies focused directly on their industry.  But a growing number of oil and gas companies are expanding their approach by adopting Open Innovation.
Open Innovation involves a structured approach to looking for solutions outside of one’s own organization.  There are many more science and engineering experts in the world than the number employed by one company.  With Open Innovation, one can reach out to the larger science and engineering community to find solutions to technical challenges.  Most organizations that practice Open Innovation engage an Open Innovation service provider to facilitate the process.  Service providers help a company capture their need in a concise need statement and then publishes this need to permit the global science and engineering community to consider it and respond.

There are several benefits to a carefully written need statement.  First, the act of writing a need statement forces one to think about what one really needs.   Second, writing a need statement focused on the most critical aspects of the need, and its possible solution, results in a reader’s realization that he/she can propose a solution.   Instead, if one disclosed a complete list of all of the specifications, then a reader would conclude that he/she cannot respond to a need because he/she cannot meet all of the specifications.  Third, writing the need statement in terms of fundamental chemistry or physics opens an opportunity to other disciplines and industries that have solved similar problems, giving the oil and gas company access to new technologies and partners.

The one caveat to receiving a proposal response to a need statement focused on a subset of the critical performance characteristics is that the approach has not been evaluated for all of the other requirements.  The result is that the oil and gas industry company must conduct more testing to determine suitability for their specific application.

Consider the following example of applying Open Innovation to find solutions outside of one’s traditional network.  An oil and gas company wanted to find materials to maintain fluid flow in an injection well while preventing particle movement during the life of the well.  A service provider helped the client write two need statements—one focused on the specific oil and gas application, and another focused on a more fundamental description of the related physics.  The second need statement asked for technology to synthesize durable particles with controllable size and porosity; this statement did not mention injection wells or any other aspect of the oil and gas industry.  The second approach brought back twice as many proposal responses as the first one.  The oil and gas company reported that most of the responses from the second approach were from previously unknown parties.  The oil and gas company contacted respondents from both approaches and eventually engaged at least one organization to explore a solution.

Companies in the oil and gas sector have used Open Innovation to address a wide variety of projects focused on equipment, materials, and safety.   Companies have sought equipment to address remote communication, sensing, and power delivery; faster, more-portable testing equipment to address crude oil quality or contamination; materials and components for harsh environments; processes to promote separation of water and oil; technology to purify water; and technology to monitor or inspect transmission, production and storage systems.  With Open Innovation, companies have gained access to new organizations outside of their traditional channels, increasing the potential for new solutions.