The new tools are also enabling companies to look outside their own ranks for new ideas. Several years ago, Eli Lilly created InnoCentive, a virtual research and development lab, so that clients like Procter & Gamble and Boeing could post the thorny problems they couldn’t solve internally—like how to get toothpaste ingredients into the tube more efficiently. Thanks to a big deal this summer with six Chinese universities, more than 100,000 students, retired scientists and serious hobbyists are now members of the site’s problem-solving army. Whoever comes up with a solution gets a cash reward of up to $100,000. As a result of this network, a third of P&G’s new products now have elements that originated outside the company.

This technique, called “crowd-sourcing,” is also used to give customers more say in new product design. Online clubs have helped LEGO Group design toy kits, which ensures they sell out quickly with almost no marketing.

—Newsweek / EMILY FLYNN VENCAT