The role of intermediaries in cross‐industry innovation processes

In this article, we investigate the role intermediaries play in the cross‐industry innovation process. Intermediaries are external institutions that support companies in their innovative activities. They are frequently used to bridge gaps between different industries. Our research focuses on the question of which capabilities an intermediary should have in order to achieve success in initiating a cross‐industry innovation. Our empirical base consists of a survey of 107 European manufacturing companies and an analysis of six collaborative cross‐industry innovation projects. The company survey is used to identify the capabilities an intermediary should have during each of the three phases of the innovation process. The cross‐industry projects, each of which involves a Swiss or a German industrial company and an intermediary, provide us with analyzable data. We conclude our study by identifying three types of intermediary: the innovation broadener, the innovation leverager, and the innovation multiplier.     

Transformational Leadership and Organizational Innovation: The Roles of Internal and External Support for Innovation*

Leadership has been suggested to be an important factor affecting innovation. A number of studies have shown that transformational leadership positively influences organizational innovation. However, there is a lack of studies examining the contextual conditions under which this effect occurs or is augmented. Therefore, this study aimed to investigate the impact of transformational leadership on organizational innovation and to determine whether internal and external support for innovation as contextual conditions influence this effect. Organizational innovation was conceptualized as the tendency of the organization to develop new or improved products or services and its success in bringing those products or services to the market. Transformational leadership was hypothesized to have a positive influence on organizational innovation. Furthermore, this effect was proposed to be moderated by internal support for innovation, which refers to an innovation supporting climate and adequate resources allocated to innovation. Support received from external organizations for the purposes of knowledge and resource acquisition was also proposed to moderate the relationship between transformational leadership and organizational innovation. To test these hypotheses, data were collected from 163 research and development (R&D) employees and managers of 43 micro‐ and small‐sized Turkish entrepreneurial software development companies. Two separate questionnaires were used to collect the data. Employees' questionnaires included measures of transformational leadership and internal support for innovation, whereas managers' questionnaires included questions about product innovations of their companies and the degree of support they received from external institutions. Organizational innovation was measured with a market‐oriented criterion developed specifically for developing countries and newly developing industries. Hierarchical regression analysis was used to test the hypothesized effects. The results of the analysis provided support for the positive influence of transformational leadership on organizational innovation. This finding is significant because this positive effect was identified in micro‐ and small‐sized companies, whereas previous research focused mainly on large companies. In addition, external support for innovation was found to significantly moderate this effect. Specifically, the relationship between transformational leadership and organizational innovation was stronger when external support was at high levels than when there was no external support. This study is the first to investigate and empirically show the importance of this contextual condition for organizational innovation. The moderating effect of internal support for innovation, however, was not significant. This study shows that transformational leadership is an important determinant of organizational innovation and encourages managers to engage in transformational leadership behaviors to promote organizational innovation. In line with this, transformational leadership, which is heavily suggested to be a subject of management training and development in developed countries, should also be incorporated into such programs in developing countries. Moreover, this study highlights the importance of external support in the organizational innovation process. The results suggest that technical and financial support received from outside the organization can be a more important contextual influence in boosting up innovation than an innovation‐supporting internal climate. Therefore, managers, particularly of micro‐ and small‐sized companies, should play external roles such as boundary spanning and should build relationships with external institutions that provide technical and financial support. The findings of this study are especially important for managers of companies that plan to or currently operate in countries with developing economies.     

The Contribution of In‐house and External Design Activities to Product Market Performance

Design may be seen as one of several key factors contributing to new product development, along with research and development, marketing, manufacturing, purchasing, etc. More and more, creative design comes to the fore, and many companies believe that superior design will be the key to winning customers. It has the ability to create corporate distinctiveness and also possesses the potential to give a product an individual or new look. Furthermore, the model of open innovation suggests that firms can and should use external and internal knowledge flows in order to create valuable ideas, and also internal and external paths to the market. Also, in the design process, a common trend toward external design skills has emerged in recent years. Due to cost and control factors, firms are increasingly outsourcing design activities. By using a sample of Belgian companies, this paper explores the contribution of design activities to product market performance. While there is mounting evidence that design can be seen as a strategic tool to successfully spur sales of new product developments at the firm level, the topic of design innovation has not yet been linked to the open innovation concept. In this paper, it is empirically tested whether design activities conducted in house differ in their contribution to new product sales from externally acquired design. So, do design activities that have been developed only with internal resources lead to a greater success than those that have been carried out with external sources of knowledge? Using a large cross‐section of manufacturing and service firms, the effects on sales of products new to the market and of imitations or significantly improved products of the firm are investigated. At first glance, the findings indicate that externally acquired design is not superior to in‐house design activities: the results show that only design activities that are mainly conducted with internal knowledge sources play a crucial role regarding the product innovation's success with market novelties. Design conducted in collaboration with external partners, however, has no significant influence. This is not the case for imitations, that is, products only new to the firm. Their success is also influenced by design activities developed with external collaborators. This effect is robust for several modifications of the model specification. In contrast to earlier literature on new technological developments, this paper argues that external design may not affect the sales of market novelties as the “market news” may spill over quickly to rivals through common suppliers including external designers.     

The logic of innovation in construction

The paper investigates the logic of innovation in construction by addressing four questions: What is actually being renewed in construction? How is it being done? Who is involved? and Why do or do not the companies innovate? The paper draws on a combination of an industrial network perspective and the exploration–exploitation dichotomy to analyze data from a study of innovation in the Norwegian and Swedish construction industries. The findings show that construction companies are increasingly working more systematically to turn project-level ideas into company-wide knowledge. This indicates an innovation logic that is oriented towards exploitation of new combinations through the internal network. The companies are also increasingly concerned with establishing closer connections to customers and users, which have traditionally been weak. This has led to an orientation towards exploitation through the external network, at least on the customer side. In turn, this may lead to more innovative behavior and renewal in the industry as a whole. However, it requires that not only the customer relationships, but also the relationships on the supply side must change. Companies in the construction industry should be conscious about their innovation logic, in terms of whether they base their innovation behavior on a biased orientation towards exploitation or exploration or towards the internal or external network. A balance is needed.     

Ambidextrous Idea Generation—Antecedents and Outcomes*

Ambidexterity, defined as the capability to develop both incremental and radical innovations, is an important driver of firm success. Idea generation is an essential starting point for both types of innovation. Therefore, this study investigates whether ambidextrous idea generation, defined as the capability to actively generate both incremental and radical ideas, affects new product development (NPD) success. Analyses on the Comparative Performance Assessment Study (CPAS) data, which includes data from 453 companies distributed over 24 countries, demonstrate that ambidextrous idea generation does indeed affect NPD program success. Consequently, this study also investigates which antecedents foster ambidextrous idea generation. The innovation paradox concept predicts that achieving ambidexterity requires overcoming paradoxical antecedents. Therefore, we tested whether combinations of financial and breakthrough orientations (the paradox of strategic emphasis), a formal innovation process and an innovation culture (the paradox of innovation drivers), tight and loose customer coupling (the paradox of customer orientation), and internal development and external collaboration (the paradox of openness) affects ambidextrous idea generation. The results show that only customer orientation and openness have the expected inverted u‐shaped effect. These finding are in line with construal level theory, which predicts that the organizational characteristics that influence idea‐generation activity must be at the same construal level to have the desired effect. The contribution of this study is twofold. First, the analyses indicate that ambidextrous idea generation has significant repercussions for the entire NPD program. Second, the results show that resolving innovation paradoxes only has an effect if the construal level of the paradox and the activity match. This finding indicates an important boundary condition for the innovation paradox concept.     

Beating the odds in the innovation arena: The role of market and technology signals classification and noise

Innovation is a risky business. Notwithstanding the attention in research on the determinants of innovation success, the estimates of the extremely high failure rates (ranging from 40% to 90%) have not come down. As a result, new approaches have to be found to address the issues that prevent organizations from reaching innovation success over a longer period of time. In this study, Signal Detection Theory (SDT) is introduced to show that it may be less important to improve innovation practices in companies, than it is to change the nature of the projects that enter the corporate innovation funnel. In our empirical study of 44 innovation projects in the pharmaceutical and electronics industry, we show that pursuing more noisy signals (uncertain technological and market opportunities) is currently beneficial for innovation success. In general, companies allocate too few resources to noisy innovation opportunities. Interestingly, we find a positive, and not an inverted U-shaped, relationship between noise/signal ratios and innovation success. This indicates that there are almost no companies that take too much risk in the current competitive environment and that many can gain from increasing their noise tolerance. The implications from this study are quite counter-intuitive in a sense that ‘risk’ is not the cause of the innovation problems, but may be a solution.     

Decision making at the front end of innovation: the hidden influence of knowledge and decision criteria

Decision making at the front end of innovation is critical for the success of companies. This paper presents a method, called decision making based on knowledge (DeBK), which was created to analyze the decision‐making process at the front end. The method evaluates the knowledge of project information and the importance of decision criteria, compiling a measure that indicates whether decisions are founded on available knowledge and what criteria are in fact being considered to delineate them. The potential contribution of DeBK is corroborated through two projects that faced decision‐making issues at the front end of innovation.     

Internal vs. external learning in new product development: effects on speed, costs and competitive advantage

The purpose of this study was to investigate how different technology sourcing strategies throughout the new product development process influenced innovation speed, development costs, and competitive advantage. We studied 75 new product development projects from ten large, U.S.-based companies in several industries. Results indicated that: (1) more external sourcing during the early (i.e., idea generation) stage was related with lower competitive success; (2) more external sourcing during the later (i.e., technological development stage was related with slower innovation speed; and (3) development costs tended to rise with greater reliance on external sources of technology, but this result was not statistically significant.     

A model for electronic commerce success

This paper attempts to develop a framework for electronic commerce (e-commerce) success. Key factors impacting e-commerce are identified from a detailed literature review. These factors are then differentiated according to their contribution to the success of e-commerce and according to the locus of impact. The final model is then cast in a structural equation modeling framework comprising four exogenous variables (internal driver, internal impediment, external driver and external impediment) and one endogenous variable (e-commerce success) with 24 observed variables. Data are collected via a questionnaire-based survey from large Australian companies. The study results suggest that increased benefits (both internal and external) from the use of e-commerce significantly predict the perceived and/or expected success of e-commerce. However, lowering of impediments (internal and external) does not significantly affect the success of e-commerce.     

The Collaboration of Innovation Intermediaries and Manufacturing Firms in the Markets for Technology

Many manufacturing firms have opened up their product innovation processes and actively transfer knowledge with external partners in the markets for technology. However, the markets for technological knowledge have remained inefficient in comparison with the markets for most products. To reduce some of the market inefficiencies, manufacturing firms may collaborate with innovation intermediaries, which are defined as organizations that act as agents or brokers in the innovation process between two or more parties. These innovation intermediaries comprise different service providers ranging from consulting companies to Internet marketplaces for technology. In light of an increasing importance of intermediary services in the context of open innovation, this paper specifically focuses on the collaboration of manufacturing firms and innovation intermediaries, which may be critical for the success of intermediary services. Based on new interview data from 30 innovation intermediaries and 30 European manufacturing firms, this paper examines the question of how innovation intermediaries and manufacturing firms collaborate concerning the following issues, which emerged as the key themes from the interviews: potential of intermediation, roles of intermediaries, types of intermediation, drivers of intermediation, complementarity of intermediation, compensation of intermediation, and the importance of repeated collaborations. The findings indicate how manufacturing firms may reduce their transaction costs in technology markets by collaborating with intermediaries. However, intermediary services can only be regarded as a complement rather than a substitute of manufacturing firms' internal activities of managing technology transfer. Thus, manufacturing firms need sufficient internal capabilities for managing technology transfer, such as absorptive capacity and desorptive capacity.     

A shift to external alliances for product development in the pharmaceutical industry

For a number of years, pharmaceutical companies have been departing from a tradition of strict vertical integration, looking to external sources for at least some of their novel technology and products. The aim of this study was to determine whether (1) this is a long term, industry-wide trend, or (2) merely a temporary or local response to acquire the technical capabilities of the biotechnology revolution of the 1970's, after which, with the new generation of technology in-house, they will revert to primarily in-house innovation. Analysis of secondary data on a representative sample of the fifteen largest drug companies in the United States, the United Kingdom, Germany and Switzerland indicated that between 1977 and 1987, these pharmaceutical companies increased their external R&D alliances nearly six-fold on average. A large and growing proportion of pharmaceutical companies' R&D alliances are formed with biotechnology firms which have proprietary technology, due to financial and innovative pressures. Far from being temporary, this resort to external sources of technology in the pharmaceutical industry follows the trends of the wider industrial world towards functional specialization. Thus, biotechnology companies are increasingly taking on the role of suppliers of innovation.     

Sectoral Heterogeneity in New Service Development: An Exploratory Study of Service Types and Success Factors

The service industry is of fundamental relevance for the economies of industrialized countries, as the service industry produces the highest growth in the gross domestic product. In this regard, new service development (NSD) represents a critical resource for competitive survival and a decisive factor of growth in the service industry. However, service firms across many industries are increasingly faced with the challenge of determining how best to manage their development of new service offerings. Although researchers have shown growing interest in NSD issues, this area is still underutilized. Furthermore, although the heterogeneity of the service industry has been emphasized for years, the current body of research on NSD mainly focuses on specific service environments, providing data that are often not comparable across different service sectors. Additionally, there is no study to date that comprehensively examines innovation activities and the relevance of service innovations’ success factors within different service industries. The aim of this exploratory study is to establish a more balanced picture of the nature of innovation activities in terms of NSD characteristics and success factors in the heterogeneous service industry. From this perspective, this paper begins with an examination of the factors that contribute to the success of NSD. Based on a meta‐analysis of new service success factor studies, 17 different success determinants are classified and aggregated to service‐related success determinants. Subsequently, a cluster analysis of 1016 service companies is used to identify different service innovation types. For the service sector, four service innovation types are determined: efficient developers, innovative developers, interactive adopters, and standardized adopters. Furthermore, based on interviews with service innovation managers, the previously identified success factors are examined for each innovation type using a standardized survey. Finally, based on the results of this exploratory study, the paper concludes with recommendations for NSD management and research propositions for each service innovation type. These propositions support innovation managers to successfully manage service innovations for the innovation type they are operating in.     

专利执行保险、技术创新与企业绩效

作为知识产权保护重要制度之一,专利执行保险通过降低技术溢出损失和外部融资约束提升企业技术创新,进而对企业绩效产生深远影响。本文基于沪深A股2012~2019年上市公司微观数据,实证研究专利执行保险实施背景下专利保护对企业技术创新和财务绩效的影响。研究发现:专利执行保险对企业技术创新存在显著的“创新激励”效应,特别是对创新投入和创新产出的提升作用明显,在考虑控制内生性问题后,上述结论仍成立;技术溢出损失效应和外部融资约束是影响专利执行保险创新激励效应的重要机制和渠道;专利执行保险和企业技术创新对企业财务绩效影响显著,其中对滞后5期内的企业财务绩效提升最为明显。研究为完善知识产权保护对创新激励作用探讨,加快专利执行保险试点推广以及如何激发企业创新提供理论价值和政策启示。     

Understanding the Antecedents,Contingencies, and Performance Implications of Process Innovation: A Dynamic Capabilities Perspective

This paper examines one of the most important sources of competitiveness in dynamic industries—the capability of firms to introduce process innovations. While the management of product innovation has received considerable theoretical and empirical attention in the literature, our knowledge about how firms become process innovators—and why many firms fail to do so—remains underdeveloped. In order to provide novel insights into the configuration of firms' process innovation activities and their performance implications, this paper draws on the dynamic capabilities approach. More specifically, this study aims to shed light on the antecedents, contingencies, and performance consequences of interfirm differences in process innovation success, that is, firms' propensity and effectiveness of implementing new production, supply chain, or administrative processes. Particular emphasis is placed upon the analysis of potential complementarities or substitution effects between innovation activities such as internal and external research and development, prototyping, external knowledge acquisition, and employee training. Cross‐sectional data from a large‐scale survey of German manufacturing and service firms serves as the basis for testing the hypotheses advanced in this paper. Findings suggest that by engaging in a broad range of different innovation activities, firms can indeed increase the likelihood of achieving process innovation success, which is in turn positively related to firm financial performance. Yet decreasing marginal returns to innovation activities have to be considered as process innovation propensity was found to increase with the number of activities pursued simultaneously only up to a point, after which negative marginal returns set in (inverted U‐shaped relationship). Furthermore, while environmental turbulence was found to have surprisingly little influence when it comes to translating process innovation success into firms' subsequent financial performance, industry membership as well as the nature of the innovation process (i.e., internal generation, external adoption, or cocreation of an innovation) emerged as key contingency factors. These findings have important theoretical as well as practical implications for managing new process introductions.     

High-Technology Service Innovation Success: A Decision-Making Perspective

Successful innovation is crucial for firm survival in high-technology service industries. This article reports on an empirical study, exploring internal innovation success factors—success factors associated with the innovating firm's competencies—by taking a decision-making perspective. The likelihood of innovation success is associated with the systematic reduction of decision-making uncertainty, as a result of organizational information gathering, diffusion, and processing activities. Effects of interfirm differences are investigated in the new service development phase of the innovation process. Cross-sectional data were collected about 251 innovation projects from companies in Europe, the United States, and Japan. Innovation success is found to be related positively and directly to how well informed and knowledgeable decision-makers are. Furthermore, the study provides evidence that a market orientation contributes as an internal success factor: An organizational climate favorable to information sharing powerfully mediates the positive effects of intelligence gathering with respect to customers and technology. The effects of competitor orientation carry a negative sign, and managerial seniority appears not to play a major role in this turbulent business. Managerial and research implications are provided.     

Competitive Advantage Through Product Performance Innovation in a Competitive Market

Superior product performance does not necessarily ensure commercial success. In many industries, companies seek competitive advantage primarily through product innovation. Competition in such markets is based on claims of technological superiority. However, unless a company can clearly establish the superiority of its products in its customers' minds, a differentiation strategy based on relative product performance is likely to be ineffective. This is particularly true in markets characterized by numerous product introductions from many competitors.
Product innovation success declines as the intensity of market competition increases. This may be caused by customers' inability to differentiate products on the basis of functional performance. John H. Friar tests this hypothesis by examining an industry, medical diagnostic ultrasound equipment, that is characterized by frequent product introductions from numerous companies.
Technical experts from the competing manufacturers believe there are differences in the image quality of their equipment and strongly agree on the factors that distinguish better performance. In most cases, however, customers could not distinguish product performance. Ironically, in a market where everyone is competing by improving product performance, product performance innovation alone may not be enough to create meaningful differentiation.
To succeed in such an environment, companies must compete on two levels. Continued emphasis on product innovation is necessary to keep pace with the competition. However, because product innovation alone is not sufficient to provide market differentiation, companies must shift their competitive thrust to other dimensions.     

Does an extrinsic reward for R&D employees enhance innovation outcomes? Evidence from a Japanese innovation survey

This paper examines the effects of extrinsic rewards for R&D employees on innovation outcomes based on evidence from a Japanese innovation survey. Theoretical and empirical studies present conflicting findings regarding the relationship between extrinsic rewards and innovation outcomes. This article seeks to shed light on the relationship between rewards and outcomes, as represented by the development of new products and services and their technological superiority and profitability. The analysis produced the following findings. First, companies that have introduced an evaluation system based on R&D performance are more likely to develop new products and services. The introduction of the evaluation system brings about success in product innovation with greater technological superiority. Second, monetary compensation has a negative impact on the development of new products and services and technological superiority. Third, these effects vary with the company size. Small- and medium-sized companies achieve higher technological superiority with performance-based evaluations. Large companies tend to adversely impact the development of new products and services and their technological superiority with monetary compensation.     

Using users: When does external knowledge enhance corporate product innovation?

Prior research on corporate innovation highlights the importance of accessing external knowledge from other firms and universities. However, survey evidence indicates that product users are perhaps the most important source of external knowledge. We build on existing theory to identify the conditions under which user knowledge contributes to corporate innovation and when the benefits will be greatest. Using a panel dataset of medical device companies and their collaborative efforts with innovative physicians, we find evidence that inventive collaborations with users enhance corporate product innovation and that the benefits are greatest in new technology areas and in the generation of radical innovations. Copyright © 2013 John Wiley & Sons, Ltd.     

Managing industrial pharmaceutical R&D. A comparative study of management control and innovative effectiveness in European and Anglo-American companies

Drug regulation and pricing have put strong pressure on the cost-benefit ratio of the innovative pharmaceutical industry. Therefore a study has been conducted in fourteen large and medium sized companies to determine some important organisational and managerial factors influencing success in pharmaceutical innovation. The study consists of structured interviews with Research Directors and questionnaires, submitted to the heads of the different research departments. The following conclusions are tentatively drawn. Firstly, the data suggest that a threshold investment of approximately $150–200 million is needed to maintain the innovative potential. Above approximately $750 million, 'economies of scale' seem to appear in pharmaceutical innovation. Secondly, an incremental strategy aimed at reducing the duration of the development process seems to be more successful than a radical strategy which lays more emphasis on discovery. Thirdly, pure play pharmaceuticals seem to be more successful than the pharmaceutical divisions of conglomerates. Management control, especially the way in which reorganisations are performed, is assessed more positively in pure play pharmaceuticals. Fourthly, the greater emphasis on human resources management in Anglo-American companies, in comparison to continental European companies, seems to be an important explanatory factor for their greater success on the pharmaceutical market.