Open for innovation: the role of openness in explaining innovation performance among U.K. manufacturing firms

A central part of the innovation process concerns the way firms go about organizing search for new ideas that have commercial potential. New models of innovation have suggested that many innovative firms have changed the way they search for new ideas, adopting open search strategies that involve the use of a wide range of external actors and sources to help them achieve and sustain innovation. Using a large‐scale sample of industrial firms, this paper links search strategy to innovative performance, finding that searching widely and deeply is curvilinearly (taking an inverted U‐shape) related to performance. Copyright © 2005 John Wiley & Sons, Ltd.     

The dynamics of product innovation and firm competences

This study examines how product innovation contributes to the renewal of the firm through its dynamic and reciprocal relation with the firm's competences. Field research in five high‐tech firms of varying age, size, and level of diversification is combined with analysis of existing theory to develop the findings of the study. Based on the notion that new products are created by linking competences relating to technologies and customers, a typology is derived that classifies new product projects based on whether a new product can draw on existing competences, or whether it requires competences the firm does not yet have. Following organizational learning theory, these options are conceptualized as exploitation and exploration. These organizational learning concepts are used to gain a dynamic and path‐dependent view of product innovation and firm development, and to reveal the unique nature and challenges of different types of product innovation. Copyright © 2002 John Wiley & Sons, Ltd.     

The diffusion of technological innovation in the commercial banking industry

This paper examines the propensity of organizations to adopt technological innovations. Technological innovations evolve from the stock of skills which organizations have accumulated over time. Linkages with extramural sources of technology are presumed to be important as well. Hypotheses are tested on a sample of commercial banks. Findings show that prior experience in information technology, in tandem with a variety of interfirm linkages, will affect the banks' decision to adopt this innovation.     

Learning to collaborate through collaboration: How allying with expert firms influences collaborative innovation within novice firms

Research summary : Strategic alliances have been recognized as a means for firms to learn their partners' proprietary knowledge; such alliances are also valuable opportunities for partner firms to learn tacit organizational routines from their counterparts. We consider how relatively novice technology firms can learn intraorganizational collaborative routines from more experienced alliance partners and then deploy them independently for their own innovative pursuits. We examine the alliance relationships between Eli Lilly & Co. (Lilly), a recognized expert in collaborative innovation, and 55 small biotech partner firms. Using three levels of analysis (firm, patent, and inventor dyad), we find that greater social interaction between the partner firm and Lilly subsequently increases internal collaboration among the partner firm's inventors. Managerial summary : Can collaborating externally advance internal collaboration? Yes. Our research found that collaboration among scientists at small, early‐stage biotechnology firms significantly increased after these firms formed highly interactive R&D alliances with a large pharmaceutical company known for its expertise in such collaboration. It is well known that alliances help new firms learn specific new technologies and commercialize innovations. Our study broadens the scope of potential benefits of alliances. New firms can also learn collaboration techniques, deploying them internally to enhance their own abilities in collaborative innovation. Managers should take this additional benefit into consideration in developing their alliance strategies. Pursuing alliance partners with expertise in collaboration and keeping a high level of mutual interactions with partner firm personnel should be important considerations to extract this value. Copyright © 2015 John Wiley & Sons, Ltd.     

Motivation and sorting of human capital in open innovation

This paper studies how business models can be designed to tap effectively into open innovation labor markets with heterogeneously motivated workers. Using data on open source software, we show that motivations are diverse, and demonstrate how managers can strategically influence the flow of code contributions and their impact on project performance. Unlike previous literature using survey data, we exploit the observed pattern of project membership and code contributions—the “revealed preference” of developers—to infer the motivations driving their decision to contribute. Developers strongly sort along key dimensions of the business model chosen by project managers, especially the degree of openness of the project license. The results indicate an important role for intrinsic motivation, reputation, and labor market signaling, and a more limited role for reciprocity. Copyright © 2014 John Wiley & Sons, Ltd.     

A paradox within the paradox of openness: The knowledge leveraging conundrum in open innovation

Firms’ innovative capabilities and performance increasingly rely on successful search and integration of internal and external knowledge. To this end, firms engage in various open innovation relationships, aiming to create and capture value in multi-actor contexts. This can give rise to a “paradox of openness” due to the contradictory role of knowledge as a key resource that creates value when shared, but also as a source of appropriability challenges. We explore the concept of a “paradox within a paradox;” the knowledge-leveraging paradox embedded within the paradox of openness. We integrate a knowledge-based view with paradox theory and develop a conceptual model to pinpoint core knowledge-related transferability and exposure tensions. We then show how these tensions are inversely moderated by innovation-related knowledge ambiguity. This ambiguity amplifies transferability tensions by making the knowledge more difficult to transfer and integrate across organizational boundaries, while relieving exposure tensions for the same reasons. We discuss potential solutions for resolving these core knowledge-related tensions by identifying separation and restructuring mechanisms that can facilitate simultaneous knowledge transfer and alleviate exposure hazards.     

The role of institutional arbitrage in the search for product innovation: Firm level evidence from Norway

Evolutionary theorizing conceptualizes the discovery of new products as a successful outcome from searching for innovation in which firms combine new and old knowledge and resources. Prior research has shown that the propensity for discovering new products is greatest when firms cross a technological and/or organizational boundary in the search for new knowledge. In this paper, we add a new dimension to this literature: we examine whether, and to what extent, crossing a national boundary, as when firms use knowledge from network partners in foreign countries, influences the likelihood that firms will introduce new products into the market. Drawing on theorizing on institutional arbitrage in the literature on national innovation systems (NIS) and varieties of capitalism (VOC), we propose that companies that cross a national boundary in searching for innovation are significantly more likely to introduce new products. Detailed survey data on firms; data on their network partners, including their location; and regression analysis show that the use of knowledge from actors in foreign NIS has a positive influence on product innovation.     

Experimenting in the cloud: The digital divide's impact on innovation

This paper builds on a recent National Science Foundation working paper that identified a strong association between cloud use and various types of innovation but did not consider whether 1) cloud adoption is a reliable indicator of the innovation orientation of a firm, or 2) cloud adoption enables various types of innovation. We estimate propensity score matching and endogenous treatment effect models to control for innovation orientation, producing evidence to test the second explanation. Findings support an enabling effect of the cloud on innovation providing concrete evidence of the adverse impact of the digital divide.     

Diffusion of a durable good innovation: The case of high bypass turbojet engines

Jackson and Kaserman (1991) model diffusion of an innovation an investment decision where the time of adoption is motivated by cost-minimization. This paper tests this model, using the adoption by American major airlines of jet aircraft embodying high bypass turbojet engine technology.The results support the Jackson-Kaserman model. The effect of aircraft age has the appropriate and significant sign. Likewise, average stage length measuring relative variable cost performance of the old and new technology is appropriately signed.     

Knowledge management and innovation in knowledge-based and high-tech industrial markets: The role of openness and absorptive capacity

Knowledge, as resource, and technological innovation, as a dynamic capability, are key sources for firm's sustained competitive advantage and survival in knowledge-based and high-tech industries. Under this rationale has emerged a research stream where knowledge management, organizational learning, or intellectual capital, help to understand and constitute the key pieces of one of the most complex business phenomena; the ‘firm's technological advantage’. This being so, it is also true that in knowledge-based and high-tech industrial markets, competitive success comes directly from continuous technological innovations, where a single organization cannot successfully innovate in isolation; therefore, firms should rely on external relationships and networks in order to complement its knowledge domains, and then, develop better and faster innovations. In this sense, I would like to highlight the cross-fertilizing role of three constructs that are nurtured by different research traditions: ‘collaborative/open innovation’, from Strategy and Innovation Management research; ‘absorptive capacity’, from ‘A Knowledge-Based View’; and ‘market orientation’, from Marketing research.     

The importance of internal and external R&D network linkages for R&D organisations: evidence from Singapore

This paper examines the importance of internal and external R&D networks for R&D organisations of multinational firms (MNCs) in Singapore and investigates corresponding R&D management requirements in this context, namely a late-industrialising country in Asia. A unique feature of Singapore is its ability to attract 'high quality' foreign direct investment, involving activities of higher value added and more complex technology without having developed full-fledged R&D activities among its business organisations, thus creating a challenging situation for subsidiary R&D managers, both in the internal R&D organisation as well as in the external research environment. This paper analyses these issues.
Based on in-depth interviews with 53 R&D subsidiaries of MNCs operating in Singapore, this paper identifies internal and external R&D management needs. Through our analysis of data gleaned from these interviews, we found that subsidiary R&D managers need to increase and/or maintain the strategic importance of their R&D site internally within their global corporate R&D organisation. This requires constant upgrading of the technological level at the R&D subsidiary and intense communication with headquarters as well as other R&D subsidiaries. Furthermore, our findings indicate that in the external research environment, subsidiary R&D managers need to create an efficient local network of external players. If these internal and external issues are properly addressed, the R&D subsidiary can effectively contribute to the corporate R&D organisation and be a critical partner in the local research network. Lessons learned from the Singapore experience include the need to develop sufficient local expertise as well as to change the mindset of managers to focus on creativity rather than precise execution.     

The advantage of foreignness in innovation

I argue that subsidiaries of foreign multinational enterprises (MNEs) enjoy an advantage of foreignness in innovation, that is, they are more innovative than domestic firms. To explain this, I present the subsidy and the incentive arguments. The subsidy argument proposes that subsidiaries are subsidized in their innovation effort by the MNE, which results in subsidiaries having more innovations than domestic firms, because they belong to a foreign MNE. The incentive argument posits that subsidiaries are subject to two sets of unique and converging pressures, one at the MNE level in the corporate factor market and another at the host country level in the consumer market. These pressures drive subsidiaries to become more successful at transforming their research and development investments into innovations. Copyright © 2011 John Wiley & Sons, Ltd.     

Relationship learning and innovation: The role of relationship-specific memory

This study investigates the relationship between relationship learning and innovation. It discusses the difference and relationship between knowledge flow and knowledge stock as embodied in relationship learning. Results show that information sharing and joint sensemaking (knowledge flow) are positively associated with relationship-specific memory (knowledge stock), and indirectly influence both explorative and exploitative innovation through their effects on relationship-specific memory. This study also examines the role of learning intent of individual firms in relationship learning. Results indicate that stronger learning intent enhances the effect of information sharing on relationship-specific memory. Finally, the study discusses several implications of this research and offers suggestions for future research.     

Examining linkages between Smart Villages and Smart Cities: Learning from rural youth accessing the internet in India

The literature on Smart Cities has not as yet paid adequate attention to the rural sector, and the potential in villages for creating smart and sustainable solutions for the 21st century. This paper focuses on linking proposed smart city strategies to smart village policies to ensure that rural youth have improved opportunities for employment through ICT initiatives to ensure digital inclusion, using primary surveys undertaken in India. The motivation was to understand how mobile telephony could be a catalyst to create Smart Villages in India, where young people can chart out new pathways to realize their aspirations with regard to tertiary education and new avenues for diversifying into rural non-agricultural employment. We use data obtained from a household survey in villages in the states of Punjab and Tamil Nadu to examine the mobile phone usage preferences of rural educated youth to identify the way forward in improving the accessibility of services on the supply side. We make the case that where youth are using mobile phone access to increase their social information base it is indeed possible that the new social media groups formed by rural youth become a powerful conduit for generating new employment opportunities. The key to accessing this solution is to use a demand driven model for mobile services that would permit a bottom of governance model to generate sustainable growth of enterprises and improved human development of these villages.     

Development and return on execution of product innovation capabilities: The role of organizational structure

This paper conceptualizes and tests an integrated model that combines the dual-core and ambidextrous models of product innovation. The integrated model distinguishes the development and return on execution of radical and incremental product innovation capabilities. The authors argue that organizational structure plays an important dual role as an (a) antecedent to the development of radical and incremental product innovation capabilities and (b) as a moderator in determining the new product performance returns from executing such capabilities. Using a sample of high-tech firms, the study finds that organizational structure is more consistent in predicting the execution of product innovation capabilities into new product performance than in predicting the development of such capabilities. For example, the effect of radical product innovation capability on new product performance is negative but nonsignificant under a formal structure, while the same effect is positive under an informal structure. Conversely, the effect of incremental product innovation capability on new product performance is positive under a formal structure, while the same effect is negative under an informal structure. The implications for managing different types of product innovation capabilities under formal versus informal structures and their effects on new product performance are discussed.     

High on creativity: The impact of social liberalization policies on innovation

Research Summary: We use a large‐sample inductive approach to explore the impact of two social liberalization policies (legalization of same‐sex civil unions and medical marijuana) and one anti‐liberalization policy (passage of abortion restrictions) on innovation. First, we show that liberalization policies increase state‐level patenting, while the anti‐liberalization policy reduces patenting. Next, we examine three possible mechanisms that could explain the findings. The results suggest that liberalization policies can increase the collaboration diversity of inventors, and hence, the rate, novelty, and impact of their innovation output, through promoting more liberal views and more openness to diversity. We also find speculative evidence that social liberalization policies increase entrepreneurial entry through promoting more diverse social interactions. We do not find evidence for liberal policies attracting top inventors from other regions. Managerial Summary: How does the social context impact the rate and direction of innovation? This article examines this question by exploring the impact of two social liberalization policies (legalization of same‐sex civil unions and medical marijuana) and one anti‐liberalization policy (passage of abortion restrictions) on innovation in the United States. We first show that liberalization policies increase patenting, while the anti‐liberalization policy reduces patenting. Further analyses highlight the impact of these policies on individuals’ openness to diversity as a driving mechanism. We show that inventors collaborate with more diverse partners after the implementation of liberalization policies, producing more innovations and more novel and impactful ones. We discuss the implications for firm location decisions, the impact of corporate social responsibility on innovation, and sources of regional competitive advantage.     

Changes in firm knowledge couplings and firm innovation performance: The moderating role of technological complexity

We investigate the effect of changes in a firm's knowledge couplings on its innovation performance. We develop arguments to explain how changes in couplings among existing knowledge domains and those between new and existing knowledge domains affect the generation of valuable inventions. We also examine how observed domain complexity, an indicator of the inherent interdependencies among knowledge domains, moderates the effects of changes in a firm's knowledge couplings on innovation performance. Our results suggest that a change in couplings among existing knowledge domains hurts innovation outcomes, but not when the degree of domain complexity is high, whereas coupling new and existing knowledge domains leads to improved outcomes, but not when the degree of domain complexity is high. Copyright © 2013 John Wiley & Sons, Ltd.