Knowledge spillovers, seen as the exchange of ideas between individuals, are one of the main catalysts, which spur Open innovation. This makes the question on how to motivate such practices a key issue in the future development of the OI concept. Two kinds of knowledge spillovers can be distinguished: internal and external. Internal knowledge spillover can be observed when there is a positive impact of knowledge exchange between individuals belonging to a mutual organization, producing goods or services. An external knowledge spillover occurs when the positive impact of knowledge is between individuals, which do not share mutual organizational ties.
Although it is typical for the commercial sector to regard information as a private asset, the larger portion of information, held by firms, remains non-rival in nature, and thus shareable without any self-destructing consequences. However, firms seem to lack the skills of clearly distinguishing these two kinds of information and choosing the proprietary (patents i.e.) or various softer legal instruments (non-disclosure agreements, confidentiality clauses, etc.) for the protection of their informational assets. Due to the aforesaid gaps, external spillovers are carefully avoided and the numerous benefits of such informational exchanges are disappointingly left unharnessed.
Individuals, lack such financial holdbacks on keeping valuable information for themselves, but at the same time do not have a strong enough incentive to provide access to the pit of ideas they possess. The challenge of finding effective ways of motivating individuals to share knowledge is essential in terms of both internal spillovers, i.e. communication between employees, and external knowledge spillovers, i.e. communication between service/product providers and their users.