Space and Open Innovation: Potential, limitations and conditions of success

Acta Astronautica 115 (2015) 173–184

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Acta Astronautica journal homepage: www.elsevier.com/locate/actaastro

Space and Open Innovation: Potential, limitations and conditions of success Magni Johannsson a,n, Anne Wen b, Benjamin Kraetzig b, Dan Cohen c, Dapeng Liu b, Hao Liu b, Hilda Palencia d, Hugo Wagner b, Ian Stotesbury b, Jaroslaw Jaworski b, Julien Tallineau e, Karima Laïb b, Louis-Etienne Dubois f, Mark Lander b, Matthew Claude b, Matthew Shouppe b, Michael Gallagher g, Mitchell Brogan b, Natalia Larrea Brito b, Philippe Cyr b, Rory Ewing b, Sebastian Davis Marcu h, Silje Bareksten i, M.N. Suma b, U. Sreerekha b, Tanay Sharma b, Tiantian Li b, Wei Yang b, Wensheng Chen b, William Ricard f, William van Meerbeeck b, Yang Cui b, Zac Trolley b, Zhigang Zhao b a

German Aerospace Center, Institute of Space Systems, Space Launcher Systems Analysis, 28359 Bremen, Germany International Space University, 67400 Strasbourg, France c Hebrew University of Jerusalem, Racah Institute of Physics, 91904 Jerusalem, Israel d National Aeronautics and Space Administration, Ames Research Center, 94035 CA, United States e QinetiQ Space nv, 9150 Belgium, Belgium f Mosaic-HEC Montréal, CGS-MINES ParisTech, Montréal, Canada H3T2A7 g Alberta Health Services, Alberta, Canada T5J3E4 h Design & Data GmbH, 50672 Cologne, Germany i Inven2 AS, 0349 Oslo, Norway b

a r t i c l e i n f o

abstract

Article history: Received 22 December 2014 Accepted 15 May 2015 Available online 27 May 2015

The classical model of innovation behind closed doors is slowly but surely being challenged by the Open Innovation model that is reshaping the way organizations bring new products and services into the market. This paper reports on the results of an International Space University (ISU) Team Project (TP) focused on the potential, limitations and conditions of success of Open Innovation in the space sector using ISU's international, interdisciplinary, intercultural (3Is) approach. Open Innovation can be defined as “the process of strategically managing the sharing of ideas and resources among entities to co-create value”. Conventional approaches to technology development for space, such as spin-offs or spin-ins, are no longer sufficient to fully describe the interactions between organizations in today's Research and Development (R&D) landscape. Traditionally, conducting space technology development and launching space missions required massive infrastructure investments, long lead times and large teams of experts. However, internal R&D, dedicated marketing departments and closely guarded intellectual property are no longer the only way to achieve success. Smaller, nimbler teams, significant use of crowdfunding, a more aggressive approach to managing risk and a great motivation to leverage intellectual property are just some of their

Keywords: Open innovation Space Case study Survey Asteroid mining

n Corresponding author. Tel.: þ49 421 24420 1288; fax: þ49 421 24420 1120. E-mail address: [email protected] (M. Johannsson).

http://dx.doi.org/10.1016/j.actaastro.2015.05.023 0094-5765/& 2015 Published by Elsevier Ltd. on behalf of IAA.

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defining characteristics. By using a case study methodology focused on asteroid mining supported by a critical literature review, the project team highlighted the potential of Open Innovation in space by identifying its most promising applications as well as its limitations. & 2015 Published by Elsevier Ltd. on behalf of IAA.

1. Introduction Human expansion into space is increasing through the continued growth of global space activities, but the traditional challenges of schedule, quality, and cost remain. These challenges are partly a consequence of a highly guarded and closed innovation process that has been prevalent in government space agencies, commercial space industries, and non-governmental space organizations (NGO), collectively called the space sector. Today the space sector is changing due to increased contributions from universities, wealthy individuals, and Small and Medium Enterprises (SME) [1]. New concepts such as Open Innovation (OI) are actively pursued with goals to reduce cost, risk, development time, and tap new ideas and resources to spur innovation. This paper, based on its associated final report and executive summary, is a product of 33 professionals spanning 15 nationalities of the 27th International Space University Space Studies Program held in Montréal, Canada. It explores the impact and potential of OI from an interdisciplinary, international and intercultural (3Is) viewpoint when applied to the space sector. In this paper we (i) introduce the theory of innovation leading to a definition of OI, (ii) present examples of OI applied to the current terrestrial and space sectors, (iii) examine the implications of OI from a space perspective, (iv) use asteroid mining as a case study to illustrate the benefits and limitations of OI, and (v) make recommendations for how to apply OI to space activities. The study is supplemented by a survey, conducted with members of the space sector to better understand their perception of OI. 2. Innovation theories Innovation can take on many forms; open, closed, distributed, linear, collaborative, radical: Many adjectives have been used to define innovation processes. Organizations strive to innovate, but many find it difficult to actually do so or even to understand exactly what innovation means. In this section, we discuss the history of innovation and the evolving rationale behind organizations’ collective drive for novelty. Then, we describe the dominant closed innovation models of the 20th century and the factors that led to their erosion. Last, we review the theoretical foundations and offer a working definition of OI. 2.1. Introduction to innovation Historically, commercial activities have fallen under two types of regimes: exploitation and exploration [2]. This implies that companies are either trying to extract

value from existing activities and grow current assets, or to generate novelty and identify future opportunities. While the former falls into the realm of day-to-day operational management, the latter is precisely the objective of innovation efforts. As theorized by March (1991), organizations must balance their efforts between getting better at what they do and learning ways to do things differently. Many companies have failed to re-invent themselves over time, rather focusing on the products and services that had created value in the past. Others experiment with forms of simultaneous or sequential pursuit of exploitation and exploration activities in order to become a more flexible organization [3]. Economists, managers, and entrepreneurs would all provide a different definition of innovation and its application. Sawhney et al. (2006) define innovation as “the creation of substantial new value for customers and the firm by creatively changing one or more dimensions of the business system” [4]. In other words, innovation is not just a technological feat; it can also refer to how organizations manage their operations, engage with outsiders, or deliver their services. It requires a collective action and an organized environment [5]. Moreover, the need and pace at which organizations must now create new value has increased to a point where it is now viewed as an all the time, everywhere imperative [6]. Innovation has gone from being a tool for growth to a survival condition [5].

2.2. Closed models Economic theory and managerial models created in the 20th century ranked companies by the capital they possessed and the strength of their Intellectual Property (IP). Companies were encouraged to find competitive advantage, increase physical assets, beat competitors to market, and protect ideas through IP mechanisms [7–9]. Not surprisingly, the process by which companies bring valuable ideas to market has been portrayed as a tight, highly guarded, closed system. Historically shedding light on such a highly sensitive process was considered ill-advised [10]. Among the first scholars to break away from the socalled black box manifestations of innovation and attempt to describe the dynamics between science, technology, and the market was Schumpeter, who coined the technologypush model of innovation. His work describes the process by which basic research produces knowledge that a company can turn into products and bring to market [11]. While the model dates back more than a century, most science-intensive fields and Research and Development (R&D) centered organizations follow this model today [12].

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This linear research-to-market sequence does not account for every innovation. According to Schmookler's demand-pull model, new solutions are created to solve existing or emerging needs as expressed by users, not the other way around [13]. Consumer needs are translated into actual products by companies and later become of interest to researchers. Closed models suggest that innovation should be aggressively protected through robust IP mechanisms [14]. Not surprisingly, the 20th century became the golden era of patents. While they remain widely used in R&Dintensive sectors and for public policy purposes today, closed models have often failed to describe the complex series of interactions that lead to innovation. Renewed understanding of value creation sources has characterized recent work on innovation [15]. Closed innovation models are not dead, only eroded [10]. They have given way to something new; the open innovation era. 2.3. Open models The modern concept of OI has gained popularity in the past decade, in part due to the work of Chesbrough [10,16]. It refers to the “purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respectively. [This paradigm] assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as they look to advance their technology” [16]. Companies increasingly use external resources internally to create value-added offers and penetrate new markets. This outside-in approach is the dominant OI form for today's businesses [17]. The reasons for this are simple: Companies are more willing and eager to leverage external ideas and resources for their own benefit, but reluctant to share with external entities. OI describes a collaboration trend in idea generation and new products and services development. It points to a shift in the innovation ideal from working inside the firm's boundaries to reaching outside them. It has become a mainstream term to define a wide array of distributed and democratized innovation activities. As of this day, Chesbrough's 2003 book has more than 8,000 citations on Google Scholar, indicating the pervasive discussion of his theories in this field of study. Yet there remains a need for better understanding of issues such as metrics and how to assess the value of OI at different levels [18]. We found existing definitions either too complex or too narrow to be useful and therefore adopted the following working definition: “Open Innovation is the process of strategically managing the sharing of ideas and resources among entities to co-create value.” 3. Practice of open innovation In this section we present practices of OI within the terrestrial and space sectors. We introduce examples of the most common implementations of OI: Inside-out and outside-in, coupled collaborative methods, crowdsourcing and crowdfunding.

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3.1. Open innovation applied to the terrestrial sector The application of OI methods within the terrestrial sector has recently become a global phenomenon. This section provides an overview of terrestrial companies from across the world that have decided to implement OI methods in their operation and the implications of their decisions. 3.1.1. Tesla An example of inside-out is the electric automobile manufacturer Tesla Motors Inc., whose CEO Elon Musk announced in 2014 that the company “will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology.” This announcement was a surprise to the automotive industry and Musk justified it by stating, “We believe that Tesla, other companies making electric cars, and the world would all benefit from a common, rapidly evolving technology platform” [19]. He notes that Tesla's biggest competitor is the behemoth gasoline car industry, and not the few other electric car companies. The goal of this inside-out strategy is to stimulate the creation of electric car companies, grow the market, and spur the industry to develop the infrastructure that will answer to these new needs. 3.1.2. Procter and Gamble Procter and Gamble (P&G) is an example of a successful implementation of the outside-in method. To apply it, a large number of technology entrepreneurs were assembled to search for promising new technologies and products. This strategy called Connect and Develop involved seeking out external actors such as suppliers, competitors, research centers, universities, and government entities to bring innovation to the company. The collaboration catches external ideas with the aim to increase innovation and reduce R&D expenses. In 2000 P&G however did not reach their intended goals but gained increased revenue, cost reduction, and experience from the outside-in method [20]. 3.1.3. Fiat: Fabbrica Italiana automobili torino Fiat Cars are an example of a successful implementation of crowdsourcing. In order to fulfill the needs of their customers, they designed and promoted a concept car called Fiat Mio with inputs from users on the Internet following the wiki-model of collaborative, open information gathering. A vote was conducted through the online platform asking contributors their preferred design resulting in the construction and showcasing of two separate prototypes. This crowdsourcing strategy was a very valuable marketing tool which contributed to improving Fiat's visibility and brand image in Brazil and internationally. This strategy allowed the participation of more than 17,000 contributors from 160 countries, generating more than 11,000 ideas [21]. 3.1.4. XiaoMi The cellphone company XiaoMi pioneered the use of crowdsourcing for developing mobile operating systems in

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China. The success of XiaoMi is linked to their innovation management strategy which involves the customers in an iterative design process. This strategy, involving 600,000 enthusiastic volunteers, contributes to the development of their mobile phone systems by frequently giving feedback to continuously improve the user experience [22]. The success of XiaoMi is linked to their innovation management strategy which involves the customers in an iterative design process [23]. This strategy, involving 600,000 enthusiastic volunteers, contributes to the development of their mobile phone systems by frequently giving feedback to continuously improve the user experience [22]. This crowdsourcing strategy allows them to provide customers tailored-made applications, responding directly to customer needs. 3.1.5. CRIAQ: Consortium for Research and Innovation in Aerospace in Québec The Consortium for Research in Aerospace in Quebéc (CRIAQ) is an example of a physical co-creation platform which aims to bring together the local R&D forces of the aerospace industry and researchers. The consortium aims to stimulate competitiveness of local industries within a global framework, reduce perceived risks, encourage collaboration and allow uninhibited sharing of ideas between partners [24]. Through the organization of workshops, companies present their needs and their challenges to other industrialists and researchers from universities and public research centers. The scope of a CRIAQ project remains in the early stages of R&D, with Technology Readiness Level (TRL) lower than three. To encourage R&D in the later stages of TRL, a new initiative was launched in April 2014 to create the Consortium for Aerospace Research and Innovation in Canada (CARIC) forming an extension of CRIAQ [25]. 3.1.6. Go corporation An example of a failed OI venture is the software company Go Corporation which developed an operating system for pen-based personal computer product called PenPoint. The company faced a common startup dilemma concerning the protection of ideas and knowledge from other corporations and sharing information to raise capital and attract customers and employees. The company eventually chose to develop an operating system in collaboration with Microsoft, encouraging them to develop applications for the PenPoint product. The two companies signed a nondisclosure agreement (NDA) regarding the co-created applications but neglected other aspects including the pen. Microsoft subsequently developed an operating system internally for the pen, owning all IP related to this technology. Due to sharing of confidential information, Go Corporation subsequently went into bankruptcy [10]. 3.1.7. AppStori AppStori is a relevant example of OI, both as a crowdsourcing and crowdfunding platform. The platform tries to implement a dialogue between developers and users in order to best design applications that respond directly to

consumer needs [26]. The principal goal of the platform is to provide crowdfunding activities to help developers raise funds to bring their ideas to market. The platform stimulates entrepreneurship and development of new mobile applications based on enthusiasts and experts thanks to the financial support provided by contributors [27]. 3.2. Open innovation applied to the space sector A number of actors within the space sector are today employing OI methods. This section examines a few of these actors, how they apply OI methods to their operation and the resulting implications. 3.2.1. Neptec Neptec Design Group Ltd is an example of a successful implementation of the inside-out and outside-in practices. They develop the TriDAR 3D laser vision system allowing autonomous spacecraft or astronauts to rendezvous with equipment that has not been marked with visual docking markers. Building on these innovations, Neptec Technologies Corp was founded to commercialize technologies developed by Neptec Design Group. One of the resulting products is the OPAL commercial light detection and ranging (LIDAR) system. The sensor is specifically designed for commercial markets, but incorporates many functionalities and technologies developed for space applications. The information transfer between these two companies has allowed them to use the knowledge gained in space to applications on Earth. Neptec is also incorporating lessons learned from its commercial business that it can spin back into its space activities. This two fold innovation system allows both companies to contribute ideas to each other while sharing development risk and benefits across several industries and markets [28]. 3.2.2. MDA: MacDonald, Dettwiler and Associates An example of the inside-out method of OI is the Canadian company MDA. Using knowledge and expertise gained from the construction and operation of the Canadarms, MDA partnered with University of Calgary to create the NeuroArm, a robotic system designed for neurosurgery. The control system designed for the Canadarm was adapted to allow the movements of a surgeon's hand to be steadier when performing surgery. The MDA engineering team was embedded in the surgical room during the development process to understand the environment and surgical rhythm to ensure the switch to virtual controls was as seamless as possible. Since the introduction in 2008, NeuroArm has gone on to perform more than 70 successful surgeries [29]. 3.2.3. ISRO: Indian space research organization The ISRO Technology Transfer Group developed an artificial foot based on space technology in partnership with Bhagwan Mahavir Viklang Sahayta Samithi (BMVSS) as part of an inside-out process. As wearing footwear within holy places are forbidden in India, this technology

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development allowed Indians requiring prostheses to participate. To enable this development, polyurethane, which is employed as a component for thermal protection systems on solid rocket motors was investigated as a material. It possesses properties required to make more durable artificial feet that do not require additional footwear. The prestige of having this technology developed through partnering with a space agency increased the product's visibility and dissemination in Indian society [30]. 4. Implications of open innovation In this section we discuss about the broader implications of OI with an emphasis on the space sector through various vantage points: economic and financial, managerial, legal, technical, and social. 4.1. Legal The inherent dual use of space technology coupled with restrictions imposed on technology transfer by national and international regulations currently acts as a hindrance for commercial entities who wish to adopt an OI approach. A key example of this would be the International Traffic in Arms Regulations (ITAR) and the United States Munitions List (USML). Under US national law ITAR predominantly dictates how companies involved with the space sector should interact with third parties including non-US entities and individuals. When considering IP rights in the context of OI, current legal research focuses on open source software or user generated content [31]. This focus leaves a number of technology avenues uncovered and poses a key challenge to the application of OI in the highly regulated space sector. In the current environment, even though there is an emergence of commercial entities looking to expand within the space sector, the majority of space activity is conducted by states through governmental entities or by being primary clients for commercial contractors. There is also an inherent tendency to protect commercial development, not only to give the creators a competitive edge in the market but also to ensure that entities do not fall foul of national export control and technology transfer regulations. The legal clarity that companies are familiar with under current operational procedures, or closed innovation, acts as a safety net and a deterrence for switching to an OI model where legal and fiscal uncertainties remain high. While OI has been successfully applied in specific space industries, its future application to the broader sector and especially the involvement of commercial entities is critically dependent on several factors including the removal of technology transfer barriers, modifying the IP law to better manage rights associated with coinventors and co-owners, resolving multiple claimants with diverse interests when OI is applied, regulating interpretation of unclear contract terms, and encouraging open exchange by simplifying protection of inventions and new ideas [31,32]. Business cases for OI in space spearheaded by governments must be proven and the

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legal situation of international operation in outer space stabilized and clarified. 4.2. Economic and financial A major benefit of applying OI is the potential for companies to leverage external sources of innovation capabilities to improve or create new products, services, processes or markets. OI also allows companies to reduce R&D costs and associated risks by dividing the expenses related to innovation with external partners [33]. These qualities are important in the space sector which is characterized by high risk, high cost, relative small size and low number of actors. This precludes many except a few large companies and national space agencies from sourcing all the expertise and resources needed for an entire program. For national agencies OI has the potential to help remove the inertia when it comes to sharing ideas and resources with outside entities. OI can also assist in developing new business models and bring in change across the agency itself and its customers [34]. OI creates an opportunity to develop an innovative culture from the outside in, through continued exposure to and relationships with external innovators [35]. Inherent to sharing is the loss of control over many aspects of the business. Due to low number of actors within the space sector, a negative image attributed to poor performance in a collaboration could potentially limit future business. Cross-border partnerships are also particularly at risk due to their exposure to changing policy, geopolitical, and economic factors. If correctly implemented, OI can reduce time-to-market of a project by maximizing the efficiency of resource allocation and instill value on all involved actors. 4.3. Managerial OI should be regarded as a managerial state-of-mind, which calls for renewed leadership styles and culture. Regardless of how good external ideas may be, a common problem in OI is the Not Invented Here (NIH) syndrome. That is, when the belief that only internal ideas are valuable [36]. This is further amplified by a deeply rooted, risk-averse culture that is inherent to the space sector. The norms and practices of an actor can inhibit the flow of knowledge and the way collaborators are perceived, which in turn impact the success of OI practices. Organizational culture influences the creation of new knowledge, fosters social interactions and shapes assumptions about which knowledge is deemed important. Knowing these aspects, it is vital that companies identify internal barriers and question their behaviors as they engage in OI [37]. Efficient OI processes are closely linked to the absorptive capacity of the company [38]. Absorptive capacity is the ability for a company to integrate external knowledge or technologies. Organizations should develop a creative slack of ideas to keep in memory the creative outputs it develops through any innovation process [39]. This retention of ideas is beneficial because unused ideas could be

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relevant and useful in future projects inside the organization, or outside as a potential future spin-off. One of the major concerns in OI is the high coordination cost related to the use and interaction with external sources and the actor's internal resources. The multiplication of flows of information, knowledge, revenue and ideas between actors needs to be managed efficiently and coherently. Another challenge is to deal with opportunistic behavior. Collaborating with external organizations of different sizes can lead to power disproportions when large companies try to use their size as an advantage. Because of limited resources and assets, actors should strive to find the right balance between assigning assets to external and open activities, and to those activities that remain closed. 4.4. Technical The complexity of technology could be an issue when looking at the implications of OI collaboration. Especially in the space sector, quality control is an important and often complex concern as the environment a spacecraft is operating in is harsh. Because of this, a single actor will have difficulty in maintaining visibility of the overall project. An actor may have to rely on external partners for its quality control. If one or more partners have a lower quality standard than expected, all actors in the value chain will be affected. Thoroughness in screening and selecting external partners for technology development is a fundamental aspect in order to assure success. In the space sector, lengthy product development time is typically the norm as only flight-proven equipment is flown. For a product to be flight-ready, a technology readiness program must be followed to bring hardware from a low to high TRL. The process required to achieve high TRL increases a product's time-to-market and associated costs. Many SMEs are unable to enter the space sector due to these challenges. This lowers the number of companies able to interact in a collaborative OI environment where diversity is an important factor. 4.5. Societal OI has a positive impact on society by bringing together different entities or communities to share knowledge and information. This sharing enables the dissemination of knowledge and information that industries, agencies, communities or users would otherwise not possess. Complex societal issues requiring the contribution of different actors, disciplines and expertise can be tackled through an OI approach [40]. 4.6. Schedule OI can be useful in the early stage of an R&D project. Nevertheless, companies should be cautious at this stage about sharing information about their core competencies to avoid losing their competitive advantages. As a project matures and TRL increases, implementing new ideas becomes increasingly difficult. Organizations tend to converge on a single implementable solution that

requires disciplined development. Introducing new ideas and multiple players at later stages can introduce rework of earlier decisions. During commercialization, OI can be valuable to reduce the time-to-market when IP is already defined and protected. OI can be valuable for the company to better respond to customer needs or to develop new applications for an existing product or service. These new applications have the potential to create new markets and stimulate potential spin-off and spin-in. 5. Asteroid mining as a case study Conducting a case study illustrates OI's effect on the cost, timeline, business and managerial, technical, legal, and social aspects of a project. Several topics were proposed and the benefits and limitations of each were considered before asteroid mining was selected. Through our selection process we concluded that asteroid mining represents a significant interest to the space sector and increases the potential disruptiveness and longevity of our study. Asteroid mining is a new venture; a handful of key players have created forward-looking roadmaps with nearterm goals and long-term capability development. Planetary Resources' roadmap was adopted as the framework for the case study. Their primary goal is to mine water-rich asteroids “to support our growth both on this planet and off” [41]. The case study focuses on water-mining for in situ access in order to produce rocket fuel for longdistance missions. Although the case study assesses an asteroid mining mission and its suitability for applying OI, our findings can be extended to other ventures. 5.1. Survey A survey was created and sent to the global space sector, including national space agencies, industry, and non-profit organizations in order to gather opinions and reveal trends regarding OI strategies. The aim was to assess needs and expectations of OI and its applicability to the case study. The first section of the survey is an agreement poll to determine respondents understanding of and attitudes toward OI. The second section covers perceived barriers to implementing OI, interest in asteroid mining, and perceived limitations of OI in asteroid mining. The survey was completed by 22 respondents. Their responses were used to guide research on the case study, and are summarized below. Almost all respondents approved of the team's definition of OI. There was no observable trend when respondents were asked if their organizations currently employed OI. While most respondents do not think that OI poses a threat to their business, one company stated, “[OI] is a detriment to competitive advantage and exposes us to ITAR issues.” When asked if they expect OI to disrupt their current business practices, respondents took opposing positions: agencies tended to agree; companies tended to disagree.

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Private companies agreed that current legal frameworks are a hindrance to OI efforts. OI is most suitable for application at low TRLs, which should make asteroid mining highly attractive. Actors are nonetheless unconvinced of the current technical feasibility of such a mission. Respondents also indicated a low confidence in the current commercial feasibility of asteroid mining. This indicates an opportunity to have a real impact on the space sector by revealing the commercial benefits of OI. 5.2. Implementation By using OI methods, an organization can extend its innovative ecosystem to provide the necessary knowledge and overcome the barriers to entry associated with an industry as complex as asteroid mining. Table 1 identifies the OI methods most appropriate for application to each phase of a mission. 5.3. Applying open innovation methods to asteroid mining OI can be implemented at all stages of the innovation process. Fig. 1 shows a project timeline and a number of methods we believe would be most effective in asteroid mining. We discuss the selected methods and offer recommendations for implementation. 5.3.1. Early stages (phases A and B) Applying OI during the early stages of the innovation process stimulates the ideation process and increases the number and diversity of incoming ideas: (a) Crowdsourcing the NEO search: Crowdsourcing can be applied most effectively during mission conception and mission design phases. The public can be invited Table 1 Potential OI methods for each mission phase: Feasibility (A); research and conceptual design (B); detailed design (C); manufacture and testing (D); operation (E); disposal (F). OI methods include: Crowdfunding (CF); crowdsourcing (CS); prizes (P); spin-ins/outs (SIO); co-research (CR); private–public partnerships (PPP); fabrication laboratories (FL); test beds (TB); and ecosystem management (EM). Mission phase

CF

CS

P

A B C D E F

X X X

X X

X X X

X X

X X

X

SIO

CR

X X X X X

X

PPP

X

FL

X X

TB

X X

X X

5.3.2. Intermediary stage (phase C) At the intermediary stage, most activities will impact the company's competitive advantage, but some OI can still be practiced while protecting core competencies: (a) Prize models: Prizes can mobilize specialized teams to develop solutions to a problem and potentially catalyze the growth of an entire industry. Because asteroid mining is not yet established and requires multiple breakthroughs, the prize method combines well with a roadmap. Prizes could incentivize designs for low-cost methods to return asteroid material to Earth, vehicles capable of making a soft landing on an asteroid, asteroid drilling tools, asteroid processing and storage methods for water, and refining methods for extracted water. 5.3.3. End stages (phases D, E, and F) In late mission phases, OI promotes co-creation with external actors, reducing time to market: (a) Fabrication laboratories: A FabLab is a small-scale digital fabrication facility [44]. These workshops bring

Final Stage Prize Models

Crowd-funding Gaming

to solve technical challenges, carry out design tasks, develop algorithms, or help analyze large amounts of data. There are already several agency-supported NEO discovery teams [42]. Their goal is planetary defense, but data and processes from these teams could be applied to asteroid mining. Involving the public also increases visibility and support for the mission while reducing the time required to complete each task. (b) Crowdfunding: A crowdfunding campaign can raise awareness and capital for a project at virtually no cost, though success is not guaranteed. For example, nanosatellites for asteroid detection could be crowdfunded with each contributor receiving a photograph of their house or being invited to exclusive launch parties. (c) Gamification: Restructuring a problem into an interactive game can entice individuals to lend their time to solving it; this process is called gamification [43]. The benefits include increasing visibility and support for the mission among the general public. Planetary Resources recently launched Asteroid Zoo, where asteroid detection has been gamified, and National Aeronautics and Space Administration (NASA) worked with Squad to develop an “Asteroid Redirect Mission” in Kerbal Space Program, where players must perform a rendezvous with an asteroid.

EM

Early Stage Crowd-sourcing

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FabLabs Coupled Activities

Intermediary Stage

Publicity Partnerships

Fig. 1. Potential application of Open Innovation in the innovation process of asteroid mining.

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together actors from dissimilar background to collaborate on complex asteroid mining issues, allowing each to gain new skills and perspectives otherwise unavailable to them. Large groups of individuals can better enable and exploit exponential technology developments like 3D printing. (b) Coupled activities: Coupled activities expand the scope of application of the technology and knowledge of one industry into another. Co-design workshops and cocreation activities with outside industries increase opportunities for commercializing asteroid mining products, services, or processes. Spin-ins and spin-offs establish new partnerships for mutual benefit, increasing revenue streams and reducing development time. (c) Publicity partnerships: The asteroid mining company can partner with sponsors for services, materials or funds. In return, the sponsors receive publicity through association and visibility of their brands.

5.3.4. Tool to compare business models We propose a suitability analysis technique to assess and prioritize which elements of a business could benefit most from OI methods. First, the company selects core elements of their business that have large influence on their success. Next, the OI methods to be considered for application are listed. The risk level that each OI method poses to each business element is assigned a value between one (very low risk) and five (very high risk). Finally, the risk values of each element are multiplied together for each method; low scores represent less risk to the company and are more attractive. This is demonstrated in Table 2, where each element and method is referred to by their abbreviation. Crowdfunding for capital is found to be most suitable for application to the asteroid mining case study.

5.4. Business case In asteroid mining, the process of asteroid identification and geological confidence, simulations models, developing new drilling techniques, and remote sensing all involve significant challenges for an organization undertaking them in isolation due to the scope of facilities and knowledge required. OI methods can address these and other challenges.

5.4.1. Business challenges of open innovation OI affects the organizational structure and data processes of a company. When new roles are created to monitor projects involving multiple entities, challenges could arise in project management processes, employee loyalty, and asset distribution. Another challenge is opening up the business to potential competitors and the wider public. Cooperation still requires protecting IP by monitoring how other entities are using it, along with the number and type of assets being shared. This monitoring might be accomplished by NDAs along with contract formulation and enforcement. 5.4.2. Business benefits of open innovation OI can find application in many activities of an organization: from reducing the cost of quality assurance or cost of development, to supplying additional funding; from incentivizing external actors to contribute to the mission, to increasing public support and opening new markets. While OI may not be suitable in absolutely all instances, there is a wide range of situations where it can benefit the organization. 5.4.3. Business case analysis We focus on water mining of asteroids, as per Planetary Resources' roadmap. Because Planetary Resources and DSI have not made their cost estimates publicly available, data from the NASA-funded study Robotic Asteroid Prospector (RAP) is used. RAP proposes to build and operate four water-mining spacecraft at a cost of US $11.8 billion over a 25-year project timeline [45]. We show that the business case could be improved by using crowdsourcing to identify asteroids and prizes to develop asteroid drilling technologies. According to NASA, the asteroid identification community has reached 600,000 members and approximately 100 new asteroids are identified each month. Assuming each person donates five hours per month, a time investment of 30,000 man-hours per asteroid is required. It would be extremely costly for a single organization to match this effort. If 20% of all detected asteroids are accessible, and 10% of these are valuable mining prospects, then each identified prospect through the crowdsourcing process represents a US $12 million in saving [46,47]. This assumes that the work is conducted with a minimum wage of US $8. The cost to develop asteroid drilling technologies is estimated at US $40 million based on Canadian Space Agency's (CSA) budget for drilling and terrestrial based rover technologies [48]. A prize set at US $20 million,

Table 2 Core elements that have large influence on the success of a business: R&D capacity (RDC), expertise (E), specialized hardware (SH), capital investment (CI), scheduling (S), and product performance (PP). In the example of the asteroid mining case study, the following OI methods to be considered for application are asteroid identification through crowdsourcing (A), co-design of drilling technology (B), and crowdfunding for capital (C). Lower the risk level, the more attractive the OI method. OI method

RDC

E

SH

CI

S

PP

Risk level

A B C

3 5 1

4 5 1

3 2 1

1 3 2

1 1 3

2 2 3

72 300 18

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similar to the technology demonstration prize in the Google Lunar X-Prize, would result in US $20 million net savings to the organization. The RAP study is used as a baseline from which we calculate the project's Net Present Value (NPV). The savings from crowdsourcing of asteroid identification (US $12 million) and from external development of drilling technologies (US $20 million) are included. The project timeline was adjusted for the mission to begin earning revenue one year earlier. A discount rate of 2.5% is used, following NASA. The original RAP proposal offers an NPV of US $2.33 billion, while our analysis suggests an NPV of US $3.30 billion. In this case, virtually all of the additional profit stems from having advanced the schedule. 5.5. Legal considerations Recommendations for changes to existing space law are made in this section with the goal of increasing international cooperation and openness in the near, medium, and long term. The changes would enable asteroid mining to be executed within an OI framework. 5.5.1. Introduction to the Outer Space Treaty (OST) International laws apply to States rather than individual entities. The responsibility lies on the State to ensure that entities acting on its behalf or operating within its jurisdiction conform to the State's obligations under international law. Under space law, the State is responsible for the authorization, licensing, and continuing supervision of national space activities. The primary source of space law is the OST which considers the exploration and use of outer space as the province of all mankind. The OST guarantees freedom of access to space for all nations, prohibits national appropriation by claims of sovereignty or any other means, prohibits placement of weapons of mass destruction in outer space, prohibits military uses of celestial bodies and outlines a State's responsibility and potential liability related to its national space activity. States that have not signed the OST are still bound to its key principles, which are considered to have become customary international law. 5.5.2. Clarification of definitions The following aspects of space law require further clarification at an international level, preferably before an asteroid mining mission is in operation: Celestial body: Under existing space law, there is currently no legal definition of the term Celestial Body. It is generally understood to include “comets, stars, asteroids, meteorites of most varied shapes and sizes-which populate outer space” as asserted by Judge Manfred Lachs [49,50]. Under this definition, entities claiming exclusive property rights to an asteroid would violate the OST and the Moon Treaty. This issue arose when NASA refused to honor Orbital Development's “ownership” of Eros asteroid, citing Article 2 of the OST [51]. Liability: Under the provisions of the OST, the launching State is liable for damage caused to another State party irrespective of whether the damage is caused in outer

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space, in air space, or on Earth (OST, 1967, Art. VII; LC, 1972, Art. II and III). The current wording of the Liability Convention only covers damage caused by a space object, which, in terms of accountability, would imply a manmade object launched by a given State. To clarify liability issues associated with asteroid mining, the international community would need to clearly define a State's liability when damage results directly from an asteroid mining mission. For example, an asteroid impacting Earth after a failed attempt by a private company to place it into a parking orbit. Sample: Article 6(1, 2) of the Moon Agreement give States the right to carry out scientific experiments and to collect and remove samples of minerals from the Moon's surface, where the size of the sample is limited only by practical considerations. Even if the term Celestial Bodies encompasses asteroids, large amounts of material could potentially be retrieved as “samples”, with the excess sold commercially. Common Heritage of Mankind: Common Heritage of Mankind (CHM) defines an area as humanity's natural and cultural heritage and protects it from exploitation [52]. This principle does not yet apply to the exploration of Celestial Bodies, though it could be extended under Moon Treaty Article 11, “To govern the exploitation of the natural resources … as such exploitation is about to become feasible.” The CHM principle may be an obstacle to asteroid mining, but we argue that “equitable sharing” can be achieved without sharing actual extracted material or derived profits. Sharing services or products derived from mining Celestial Bodies provide a tangible benefit for humankind in line with the principles of the OST. 5.5.3. Future role of the United Nations In 2013, NASA proposed a bill to establish Apollo landing sites as national historical parks protected for future generations by the US National Park System [53]. The parks would also be proposed to the United Nations Educational, Scientific and Cultural Organization (UNESCO) as a World Heritage Site. This bill assumes that UN jurisdictional authority extends beyond Earth. If this assumption is upheld by the international community, then the UN would have authority to deal with matters related to asteroid mining. In this case, we suggest that the operational structure of the International Seabed Authority may provide a viable model for overseeing asteroid mining activities. We see the UN's future role as a licensing body for asteroid mining, able to hold States accountable under international law. 5.6. Case study conclusions Asteroid mining is a high-risk venture pioneered by a few private companies and government agencies; it is yet to be proven as a viable industry. Working from the available research, we have attempted to demonstrate the business case and the legal obstacles. Challenges specific to this venture and the associated opportunities for OI were discussed and examples were given.

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Table 3 General recommendations to all organizations, recommendations aimed at space agencies, recommendations aimed at private companies, and policy and law recommendations. Type

Recommendation

General

Organizations should find the right balance between open and closed innovation Organizations should consider how to apply Open Innovation at all phases of the innovation process Organizations should adapt their managerial and research, and development structures by implementing Open Innovation Researchers should develop a toolkit of Open Innovation methods to assist space sector actors in identifying the viability of an Open Innovation approach National space agencies should consider how to apply Open Innovation in mission phases A, B, and C at the beginning of each project National space programs should advance a mechanism to resurface discontinued research projects to take advantage of innovative ideas Private entities should determine at what Technology Readiness Levels Open Innovation can best be implemented. This decision should be made in reference to particular business operational models Asteroid mining companies should use more Open Innovation methods to accelerate the project development process The United Nations along with national entities should provide further clarity on regulatory frameworks to allow new applications in the space sector

Space agencies

Private companies

Policy and legal

It is expected that mission costs will decline as the market grows and the industry matures. Planetary Resources has used OI in the past; crowdsourcing their search for NEOs and crowdfunding upfront mission costs. Other OI methods will continue to improve the feasibility of asteroid mining. The case study successfully demonstrates how the concepts of OI could be applied to a specific space venture. The team has proposed a tool to assess the potential risk of OI methods to a project. Planetary Resources’ roadmap provides opportunities to implement several OI methods at all phases of the mission. Our case study suggests that bringing together different actors, whether taken from the same or from different industries, and managing the sharing of ideas and resources for the co-creation of value is, in fact, a sustainable strategy for an organization.

6. Recommendations The paper has portrayed a space sector that is growing increasingly complex. This complexity, however, also enables innovative solutions to address the substantial investment and challenges in schedule, cost, and quality as required by space projects and missions from new actors participating in the space sector. To help organizations establish new value-creating collaborations, we have explored the benefits and limitations of OI in their application to the space sector in general and to asteroid mining specifically. In Table 3 we present actionable recommendations derived from our findings. It is important to note that the authors do not suggest abandoning closed innovation practices entirely, but rather to examine OI as complementary to the existing business model. Given the findings of the study, three overarching recommendations are useful in providing guidance on what is needed to encourage the proliferation of OI methods in the space sector. First, OI may be applied across all TRLs and mission phases. At early phases, OI is useful in the ideation process to tap the competencies of

external actors thus stimulating creativity and improving the quantity, quality, and diversity of ideas. In the later stages, spinoff applications of specific technologies or knowledge can be leveraged to benefit other sectors. The strongest resistance can be seen in the perception of current space leaders, as reflected in the survey results, who maintain that applying OI methods at early TRL phases is more likely to yield the greatest value. Second, it is recommended that the suitability analysis technique presented in Section 5.3.4 to be extended to a proper toolkit as to operationalize the concept of OI for specific organizational needs. An OI toolkit will provide a roadmap on how to apply OI methods at specific phases of a mission or project. This would be particularly useful for the space sector as a plethora of new actors continue to carve out roles in the new space era. Third, export control is a significant legal barrier that discourages OI, particularly those built on international collaboration. It is recommended that states and international actors, with a specific emphasis on the UN, consider how existing treaties and regulations in other sectors could be adapted to develop a future legal framework capable of accommodating these concerns. The framework should provide more detailed instruction on the exploitation of space resources so as to, inter alia, help identify where OI may be applied in asteroid mining activities.

7. Conclusions The main goal of the project was to explore the potential of OI to grow the space sector. The findings suggest a need to clarify and extend the current legal framework for outer space activities, the removal of terrestrial technology transfer barriers, and modification of IP laws in order to encourage the wider spread of OI within the space sector. Contrary to the survey results and the perception of current space leaders, if OI is applied strategically, additional value can be created at a wide range of TRL or mission phases and is illustrated by the case study in asteroid mining.

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To support the space sector in identifying OI methods at specific mission or project phases, a toolkit is envisioned which can provide roadmaps to an organization. Our desire with this paper is to spur debates about the applicability and operationalization of OI techniques to the space sector. Future work related to the applicability of OI on different phases, the current legal barriers and the envisioned toolkit would add great value to these discussions.

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