I investigated how BMW a company built on a century of engineering-led, largely closed innovation is navigating the shift toward open innovation: the deliberate use of external knowledge, partnerships, and collaboration to accelerate growth. Rather than treating open innovation as a checklist of partnerships, the project uses it as a diagnostic lens to ask a sharper question: is BMW actually transforming internally, or just collaborating externally while staying closed at the core?
 

To answer that, I combined secondary research on open innovation theory and BMW's public initiatives with a primary interview with a BMW design strategist, whose insight into the company's internal culture particularly the tension between engineering and design leadership  became the throughline of this project's argument.
 

Part 1: What Open Innovation Actually Means
Henry Chesbrough, who coined the term, defines open innovation as the use of purposive inflows and outflows of knowledge to accelerate internal innovation and expand markets for external use of innovation. In practice, this breaks into three archetypes:

• Inbound (Outside-in): Pulling external knowledge from users, partners, suppliers into internal R&D

• Outbound (Inside-out): Sharing internal ideas, IP, or unused innovations with the outside market

• Coupled: A balanced, two-way exchange combining both
   

The distinction matters because a company can look "open" while only ever doing the safe half of the equation pulling ideas in, never letting any out. That asymmetry turns out to be central to understanding BMW.
 

Part 2: BMW's Journey from Closed to Open

BMW's instinct toward closed innovation isn't arbitrary it's a direct byproduct of a century-long identity as the engineering-driven innovator in its category. That reputation, and a justified fear of being imitated by competitors, has historically made the company reluctant to expose its internal processes. The wider industry didn't leave that instinct unchallenged, though: as technology accelerated and customer feedback became commercially valuable, companies like IBM and Cisco began treating external collaboration as core strategy rather than a risk to be managed  and automakers, including BMW, followed suit through inter-firm value-chain partnerships.
 

Part 3: Where BMW Stands Today

Mapped against real initiatives, BMW's open innovation footprint looks more advanced than its cultural instincts would suggest:

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Reading across these, a pattern emerges: BMW is comfortable with inbound and coupled processes  pulling in outside expertise on its own terms but has done almost nothing meaningfully outbound. It rarely shares unused ideas or internal knowledge with the wider market. That's not incidental; it's risk-averse by design, and it's the clearest evidence that BMW remains in transition rather than fully open.
 

Part 4: The Design Gap BMW's Real Bottleneck

This is where the interview reframed the entire project. Her account of BMW's internal culture surfaced a structural detail that doesn't show up in any press release: there are no designers on BMW's board. Decisions are engineering-led by default, and designers have to build an extensive case just to be heard, which means design-led insight, exactly the kind that open innovation is supposed to surface, gets filtered through a lens that isn't built to prioritize it.
 

The project argues this is BMW's actual bottleneck,not a lack of partnerships, but a lack of design authority to act on what those partnerships reveal. Open innovation gives design a natural entry point: participatory design methods, ethnographic user research, and co-creation workshops (potentially rebuilding the dormant Co-creation Lab) could position designers as the ones running open innovation initiatives, not just consulting on them. That shift from design as justification-required input to design as innovation leadership is presented as the real lever for BMW's competitiveness, more so than any single new partnership.
 

Part 5: The Business Case for Making This Core Strategy

• Cost-efficiency - distributing R&D and manufacturing costs across partners

• Risk mitigation - spreading the risk of failure across collaborators rather than absorbing it alone

• Agility - faster response to market and customer shifts by incorporating outside ideas directly

• Market access - reaching customer segments and emerging markets BMW couldn't access alone

• Brand differentiation - co-creative, socially-impactful platforms around urban mobility and inclusivity

• Organizational transformation - using external perspective as a forcing function for internal change
   

Part 6: The Roadblocks

• Cultural resistance - a centralized, hierarchical structure isn't built for open collaboration by default

• Integration difficulty - folding external input into global, centralized operations is logistically hard

• Communication barriers - the same design/engineering divide Ritzer described also slows cross-functional collaboration

• IP concerns - sharing ideas externally raises real intellectual property risk; IBM's early-stage patent commercialization strategy is offered as a possible model

• Strategic alignment - design-led innovation and core business objectives need deliberate integration, not just goodwill
   

Conclusion: The Barrier Is Internal, Not External

The throughline of this project is that BMW's constraint on open innovation isn't the market — it's the organization itself. The company has proven it can execute partnerships (AWS, Tata, iDrive) competently. What it hasn't done is let those partnerships change how decisions get made internally, and the absence of design at the leadership level is the clearest symptom of that. For BMW to treat open innovation as a genuine core strategy rather than a series of well-executed side projects, the culture and structure have to adapt to open innovation — not the other way around.

Read the case study HERE