Future of open innovation: Linux vs. Innocentive

What is the future of innovation and can it be predicted and predetermined?

It seems to me as if the technology is way faster than our rate of adaptation to it or our capability to foresee and respond to its implications. The arena in which the game is being played has changed but it seems as if the rules still have a lot of catching up to do and will perhaps never be able to catch up to it. Are we playing a global game with local rules?
I will state my case by considering the differences in the open innovation models and their implications in the case of Linux and Innocentive and I don’t claim to have read many books on the topic but this is what I understand so far.

Looking at the case of Linux (or others like MySQL, or Apache, Firefox), all these products have been created by the independent innovators and have proved to be mutually beneficial, but what about the model of Innocentive? It is being hailed as a great change a great concept that will make the companies more competitive more profitable and so on. But is it really a win-win situation??may be and may be not.

The implications of obtaining solutions through websites such as Innocentive :
- The companies don’t have to hire a full research team, or invest in up gradation or long term investments. It is in a way a quick fix solution for companies.
- One lump-sum payment is given to the innovator, no need to provide benefits and other perks, which means again huge cost saving for the companies.
- The number of supporting staff that is hired for the R&D teams is not needed any more.
- So one can actually run a virtual company with a staff of 5-8 people in a small office space or just from home, by outsourcing, R&D, manufacturing, and admin. Support.( various companies are already doing it, such as Point Therapeutics ( recent news ref. www.Biospace.com)) both as a cost cutting measure and the core model.

This may result into:
- Lesser permanent jobs
- Lesser jobs for the local populations ( esp. in countries like Canada where the min wage is $8 per hour…that’s in Alberta, can we compete with countries with R&D capability of same calibre and wages 1/10 th of Canadian wages?)
- An overall reduced private R&D base ( due to lesser incentive for investment in long term organizational R&D capabilities)

And wait a minute…what about other government policies such as temporary worker policies? The Canadian laws require a foreign worker to have a clearance from HRDC to the effect that the person being hired is not taking away a job from equally qualified Canadian. Recently US senate debated (I am not sure if it passed a bill yet) on limiting the outsourcing, the question is do these regulations apply on companies based on the model of Innocentive?

I know I sound sceptical, when most people are upbeat about the future of open innovation, but either I am grossly misinformed or there is an urgent need to limit the expanse of the open innovation, because we still don’t have completely porous borders and a min wage of $8 per hour (and same labour laws) throughout the world. Waiting to hear your comments.