A distributed innovation process based on purposively managed knowledge flows across organization boundaries, using pecuniary and non-pecuniary mechanism in line with each organization’s business model is called Open Innovation according to Chesbrough. This thesis has two main objectives. First is to investigate the application of Open Innovation business model in nanotechnology sector both in Canada and worldwide and to compare it from different aspects. The second objective involves finding a causal relation between applying different Open Innovation practices and having better performance of firms. The thesis’ methodology involves an extensive online survey run in several countries whose results were analyzed through descriptive and inferential statistical analyses. Moreover, based on the gathered data a simulation model was created and several scenarios tested. The findings revealed that it is mostly large companies which implement Open Innovation practices, while the level of implementation is much lower among the small and medium enterprises. In Canada, these types of practices are more common in Quebec than in other provinces. European countries are known to be pioneers in Open Innovation business model, the results revealed a higher frequency of applying Open Innovation practices in European firms than Canadian firms mostly in collaborating with universities. The results of inferential statistical analysis suggest that applying both Outside-In, which is opening up company’s own innovation to other companies for any kinds of contribution, and Inside-Out, which is unused and unutilized ideas and technologies to be used by other firms and companies for their businesses, pecuniary Open Innovation practices together has a significant effect on the performance of firms in terms of an increase in technological and scientific outcomes (measured by the number of patents and articles). However, if only one type of pecuniary Open Innovation practice (either Outside-In or Inside-Out type) is applied then there is no such positive impact detected. The simulation model built in Vensim has considered four different scenarios and confirmed these findings as well and predicted the close future of the firms in this industry by applying the proposed scenarios.  It is thus suggested to embrace the Open Innovation model in its entirety instead of focusing on the implementation of isolated practices.