The co-production of value in digital,university–industry R&D collaborative projects

In the context of R&D collaborations between universities and industry, this study investigates the co-production process and the contextual elements that shape it. We develop a conceptual framework that builds on the service-dominant logic perspective that value propositions emerge from the interaction between co-producing parties and the integration of resources. Specifically, the framework explicates how individual, organizational, and external factors shape the type of interactions and the platforms used, the availability and use of operand and operant resources, and the organizational and individual outcomes sought in R&D collaborative projects. We investigate the interplay among these factors through group interviews with UK industry practitioners and university researchers in the context of digital research projects. The types of interaction, resources, and outcomes sought that characterize successful R&D collaboration are revealed, and the contextual aspects that enable, facilitate, block, or create barriers to successful R&D collaborations are identified. Finally, we propose five practical principles for the successful development of collaborative R&D projects within the university–industry context.     

Funding sources and the strategic roles of decentralised R&D in multinationals

This paper analyses the sources of funding accessed by laboratories of foreign multinational enterprises (MNEs) operating in the UK. The five separate sources of funding are systematically related to four different roles that such labs are seen to play. The results confirm the view that decentralised R&D in MNEs now plays significant and carefully defined roles in the technological and competitive evolution of these enterprises. The strong position of central group funds is seen to reflect two trends in the status of decentralised labs. Firstly, to support their willingness to activate strong local scientific inputs for longer-term and speculative (risky) research programmes. Secondly, to inculcate an acceptance of individual labs to operate within interdependent networks of group operations (precompetitive research or product development).     

Cross-Pacific internationalization of R&D by U.S. and Japanese firms

Efforts by MNCs to develop coordinated international R&D networks have taken place from different historical bases of internationalization and in the context of differing trends in the role of R&D within the corporation, as the cross-Pacific R&D investment in leading U.S. and Japanese firms in the electronics industry shows. Japanese firms, although they espouse a strategy of 'localization', are establishing wholly-owned R&D centres in the U.S. with highly specialized technology mandates that to be used by the company must be networked with their parent organizations. U.S. firms rely on joint ventures or wholly-owned labs with a wider array of technologies that face strong pulls to a local orientation. The patterns are somewhat out of line with the models of internationalization each side is espousing.     

Actor roles and role patterns influencing innovation in living labs

Innovation networks are embodied and shaped by their participants. This paper examines actors' roles in living labs, which are defined as networks of open innovation. The study utilizes four approaches to roles: structuralist, symbolic interactionist, resource-based, and action-based approaches. Our empirical analysis of 26 living labs in four different countries identifies a number of actor roles associated with open innovation. In addition, it reveals four role patterns characteristic of living labs: (i) ambidexterity, (ii) reciprocity, (iii) temporality, and (iv) multiplicity. These patterns distinguish actor collaboration in networks characterized by heterogeneous actors, the coexistence of individual and shared motives, high degree of openness, and user involvement. Scholars and practitioners of innovation learn that understanding of role patterns in living labs can contribute to building, utilization, and orchestration of open innovation networks.     

Open versus closed innovation: development of the wide strip mill for steel in the United States during the 1920s

A paired comparison is made between rival attempts to develop the first continuous rolling mill for wide strip in the United States during the 1920s. One firm was secretive, and the other relied on collaboration. Development of the wide strip mill is a natural experiment comparing closed and open innovation as two firms were competing for the same target using different institutional arrangements for their R&D. Wide strip‐rolling technology was developed by rival teams in the United States during the mid‐1920s. The less successful team at Armco, Ashland, Ky was closed to outside influences. Breakthroughs came from Columbia Steel at Butler, PA, which pursued an open pattern of cooperation with equipment suppliers. Columbia Steel's collaboration with machinery suppliers, use of independent advice on bearing technology and willingness to learn from precursors in copper rolling enabled them to build a successful wide strip mill complex, commissioned in 1926. Butler established the dominant design for the next 80 years. The leading equipment supplier at Butler, the United Engineering and Foundry Co., led global sales of the technology for four decades. It is not clear how far this example of successful open innovation in the US inter‐war economy is typical. Historical studies of the management of R&D focus on formal, science‐based research in large corporate labs rather than engineering development.     

How Canon and Sony Drive Product Innovation Through Networking and Application-Focused R&D

To ensure the ongoing vitality of a company's product offerings, R&D professionals must play a daunting array of roles. The already rapid, yet still accelerating, pace of technological change may lead some companies to devote more resources to intensive internal research efforts. However, the shift toward global competition demands a more market-oriented focus from R&D; clear understanding of current and potential markets must drive R&D efforts. And efficient, cost-effective manufacturing of new products requires an R&D organization that understands and interacts effectively with the production department. How does a company create an environment in which its R&D organization comprises market-savvy, production-friendly experts in diverse technologies? With case studies of R&D efforts at Canon and Sony, Sigvald Harryson identifies and illustrates the key mechanisms that these companies use to foster product innovation. His examples show how Canon and Sony use a combination of external and internal networking mechanisms to identify and acquire key technologies and related skills, gain market knowledge, improve the results of internal R&D efforts, and ensure the successful transfer of these results to efficient production processes. He identifies four key mechanisms underlying successful product innovation at Canon and Sony: strategic training and job rotation for engineers, application-driven R&D, direct transfer of development teams from R&D to production, and extensive networking with external centers of excellence and key suppliers. At Canon, the initial training program for all researchers and engineers begins with three months of work on a production line. Sony's new researchers and development engineers spend one month in production. Both companies also give their new R&D professionals three months of training in sales and marketing. The emphasis on market-driven research at both companies means that researchers have identified some commercial application for almost every initial research proposal that gains approval. Neither company treats research as a long-term assignment; almost all engineers at both companies eventually move from the labs to production. And rather than viewing this job rotation strategy as a drain on the technological expertise in their labs, both companies rely on strong external networks with key suppliers and university-based researchers as important sources for acquiring new technologies and the competencies needed to support them.     

Buyer-supplier relations in the UK - automotive industry: Strategic implications of the Japanese manufacturing model

This paper documents the adoption of the Japanese model of manufacturing in the U.K. motor industry. Internal developments by the vehicle assemblers and their suppliers are examined. It is argued that the Japanese model involves very high intra- and interorganizational dependencies. Although this does not cause problems in Japan due to the structure of the Japanese motor industry, the structure of the UK vehicle industry presents severe obstacles to the successful use of Japanese methods. Pursuit of the pure Japanese model within the existing industry structure appears to be fraught with problems. Moreover, such an exercise risks sweeping away potential strengths of the existing structure.     

Open social innovation dynamics and impact: exploratory study of a fab lab network

The aim of this research is to explore the dynamics and impact of open social innovation, within the context of fab labs and makerspaces. Using an exploratory methodology based on 12 semi‐structured interviews of fab lab founders belonging to The Centres for Maker Innovation and Technology (CMIT) programme – a network of 170 fab labs located in Eastern Europe – this research explores the impact of an adopting an open approach in relation to the different stages of social innovation (prompts, proposals, prototypes, sustaining, scaling and diffusion, systemic change) as well as social impact. The main results of this study are that while the CMIT programme provided each fab lab with similar initial conditions (identical funding, objectives and rules), the open social innovation approached adopted enabled to give birth to a wide diversity of fab labs, each being very well adapted to the local environment, social needs and constraints and able to deliver social impact in just a matter of years; a result that would be hard to achieve with a centralised top‐down approach. The study identified three types of CMITs – Education, Industry and Residential – which could be similar or different depending on the stage of social open innovation. Furthermore, this paper discusses the main difficulties social entrepreneurs encounter as a part of the open social innovation process, as well as means to overcome them. In this respect, this study adds to the literature on fab labs by providing more comprehensive view of the challenges faced by fab labs (and makerspaces) founders, as well as suggestions of strategies enabling to ensure their long‐term sustainability.     

Exploring the concept of coopetition: A typology for the strategic moves of the Finnish forest industry

The Finnish forest industry is sustainable, well-established, internationally oriented and successful. For companies in such a basic industry, an industry that features mainly bulk products and relatively small domestic markets, sustainability in business may hinge on long-term strategic choices. It is proposed in this paper that it is not only strong domestic competition, but also—and especially—coopetition traditions (simultaneous cooperation and coopetition) that are the crucial factors contributing to the success of the industry. This article contributes to the literature by providing industry-level tools, namely a coopetition framework and combined coopetition typology. The findings indicate that coopetition traditions have been present throughout the activities of the Finnish forest industry, enabling sustainability of the industry to a significant extent. Managerial and theoretical implications are also discussed.     

R&D networks and innovation: decentralised product development in multinational enterprises

This paper documents the ways in which overseas R&D in MNEs now plays roles in what are innovative new approaches to innovation itself. Networks of laboratories are seen as supporting both the short-term and long-term competitive evolution of the MNE group's globally-effective product innovation.
In terms of the immediate commercial application of new products for global markets it is argued that product development labs work within creative overseas subsidiaries in MNEs. These aim to derive variants of the new product that fully meet the distinctive needs of each key regional market.
Another separate network of decentralised MNE labs carry out precompetitive (basic or applied) research, embodying particular areas of technological comparative advantage of their host countries. This network of labs therefore provides inputs into a centrally-articulated programme whose objective is to provide the basis of the longer-term technological evolution of the MNE, by upgrading the core knowledge from which future generations of innovative products can emerge.     

The effect of inducement prizes on innovation: evidence from the Ansari X Prize and the Northrop Grumman Lunar Lander Challenge

Inducement prizes are increasingly popular because of their potential to induce technological innovations and attain related goals. Academic research, however, has barely investigated these prizes. This paper investigates the motivation of prize entrants, the characteristics of their research and development (R&D) activities, and the overall effect of prizes on innovation using case study research and documentary data sources. The Ansari X Prize and the Northrop Grumman Lunar Lander Challenge, both considered successful technology competitions in the aerospace sector, are investigated. The findings show that, first, incentives created by competitions, particularly those that are nonmonetary, attract unconventional entrants. The market value of the prize technologies motivate entrants as well but do not attract traditional industry players. Second, limited technology development lead times and no up‐front funding characterize prize R&D activities, yet their differences with traditional industry practices are caused by participant‐level factors. Most importantly, the introduction of novel R&D approaches is associated with the participation of unconventional entrants. Third, these prizes induced innovations over and above what would have occurred anyway, with the caveat that they were linked to significant technology incentives and fundamentally, ongoing R&D processes. These findings put forward lessons that inform the design of more effective prize competitions.     

Innovation objectives,knowledge sources,and the benefits of breadth

Given the inherent risk of innovative activity, firms can improve the odds of success by pursuing multiple parallel objectives. Because innovation draws on many sources of ideas, firms also may improve their odds of successful innovation by accessing a large number of knowledge sources. In this study, we conduct one of the first firm‐level statistical analyses of the impact on innovation of breadth in both innovation objectives and knowledge sources. The empirical results suggest that broader horizons with respect to innovation objectives and knowledge sources are associated with successful innovation. We do not find diminishing returns to breadth in innovation objectives, which suggests that firms may tend to search too narrowly. We interpret these results in light of well‐known cognitive biases toward searching in relatively familiar domains. Copyright © 2009 John Wiley & Sons, Ltd.     

On the determinants of non-market strategy: The separations mechanism and cost shifting in the telecommunications industry

This study examines the relationship between performance levels and the levels of cross-subsidy attained by local exchange carriers in the United States telecommunications industry. These cross-subsidies have been obtained by firms via their engagement in a separations mechanism, based on a cost allocation process, which telecommunications sector regulatory authorities use. Non-market strategies have assumed primacy in the activities of several sectors world-wide. Thus, understanding non-market strategic choices is important in the analysis of firms’ behavior and performance. Active engagement in the separations process is an important non-market strategy in the telecommunications industry, as a firm relatively successful in this activity can gain large cross-subsidies. The analysis establishes that less profitable firms obtain greater cross-subsidies. Once the profitability variable is decomposed into its two main components, which are productivity and price recovery, the impact of the profitability variable reduces. Firms which are relatively unproductive, as well as those unable to recover higher output prices, obtain relatively greater cross-subsidies. These results are inconsistent with the postulates of the strategic cost-allocation and behavior literatures but are consistent with x-inefficiency and rent-seeking perspectives of firms’ strategic actions.     

Skew and heavy‐tail effects on firm performance

Research summary : Most strategic management studies adopt an average‐centered view that uses the central tendency to explain between‐group variation in performance (i.e., performance differences between business units, firms, industries, and countries). In this study, we explain within‐group variation using a variance‐centered view that focuses on the peripheral characteristics of performance distributions as defined by skew and heavy tails (i.e., variance and kurtosis). Drawing on performance feedback theory, we hypothesize that successful firms tend to develop a positive skew in their performance distributions, which we call a “positive skew effect” in this study, and that heavy tails moderate this effect. Our analysis of the performance of a group of foreign affiliates provides general support for our hypotheses at both the firm and segment (industry and country) levels. Managerial summary : Managers of multi‐business firms use various approaches to improve the aggregate performance of their business units. Some expand the range of upper performance outliers (exploration) or reduce the range of lower outliers (downsizing); others improve the performance of current business units (exploitation). We find that firms with superior performance tend to have a balanced mix of the three approaches. We also find that segments (countries and industries) with higher mean performances provide environments that facilitate the entry of productive firms and the exit of unproductive firms and provide environments in which incumbents can further improve their performance by learning from others. We observe that successful firms and segments have a positive skew in their performance distributions, which we call a “positive skew effect.” Copyright © 2016 John Wiley & Sons, Ltd.     

The development of networks between engineering contractors and their clients: the special case of partnering

This paper sets out to show how partnering arrangements between engineering contractors in process plant contracting and their process industry clients have led to increasing collaborative contributions at the 'front end' of capital asset formation. Partnering arrangements are seen here as formalised long-term contracts between process plant contractors and their clients, intended to apply to engineering and other services in major capital projects over a number of years.
While research does not appear to have been affected to a significant extent, partners seem to be interacting increasingly on process development and design. One outcome of partnering is to increase the contractors' involvement in their clients' overall business objectives. As a result of this change in the character of their services, contractors are more inclined to seek opportunities to improve plant efficiency, rather than following given specifications. This interaction of entities with a different focus and, to some extent, different skills is a potential source of innovation which to date has not been realised to any great extent.     

Change processes in open innovation networks – Exploring living labs

Examining change in business networks can illuminate how time, temporality and process unfold and engage different stakeholders in open innovation. Living labs are increasingly popular open innovation networks that provide a fruitful area in which to study change processes and their influencing factors in network dynamics. We adopt a longitudinal process perspective to analyze eight living labs focused on urban development in a Northern European city. Our analysis reveals six pertinent processes: (i) expansion, (ii) reinforcement, (iii) focusing, (iv) unification, (v) termination, and (vi) recurrence. These processes reflect change in networks characterized by diverse actors, the coexistence of individual and shared motives, a high degree of openness, and user involvement. The identified change processes are a result of living labs disclosing their needs, data, and operations to their stakeholders. We propose a theoretical concept, which we describe as “network boosters”, to illustrate the factors that foster change processes. Scholars and practitioners of innovation management can learn from these findings that understanding change in open innovation networks may help to depict and predict short- and long-term relationships, and it may assist them in managing innovation in open environments.     

Co-innovation in networks of resources — A case study in the Chinese exhibition industry

This work explores how network partners collaborate to innovate and innovate to collaborate and thereby achieve value. The innovation processes analyzed are within an IJV in the Chinese exhibition industry. The findings highlight that the IJV's development of a successful trade show resulted from effective co-innovation by partners which enabled the exploitation of opportunities in an industry characterized by rapid growth and continuing structural change. Partner co-innovation enabled evolving strategic and operational capabilities which has led to continued and growing market success. This co-innovation involved the targeted co-mingling of partner resources which creates value that motivated continued cooperation. The effectiveness of the partners' activities is evidenced by the growing size and prestige of their large-scale trade show as well as the expansion of the IJV into other endeavors. The paper concludes by considering the way these innovative processes can be applied in other contexts.     

Business model fashion and the academic spinout firm

Studies indicate that most European new, technology–based firms (NTBFs) have been founded by relatively senior, highly–educated personnel coming from existing companies. These founders already have strong, industry and market links. A relatively small proportion have spun out of university or other public research facilities. However, this latter group has attracted particular attention from several interested groups, including governments and the scientific establishment. For governments, this has appeared to offer a means whereby public policy could have a direct and significant impact on economic development. Hence substantial public resources are increasingly being committed to support these developments in most industrialised countries. The founders of HEI spinouts are often academics aiming to commercialise nascent technologies and they face challenges which are less likely to arise for the founder with an industry background. The emerging technologies often commercialised in academic spinouts may have many potential applications. At the outset founders must make critical strategic choices of applications to develop, if they are to attract the substantial resources often needed for the risky development process. Some of these choices need an understanding of changing fashions in business models and investors' current preferences for particular industries. It is a difficult challenge for academic founders with little prior market knowledge and linkages, and no previous experience of professional investors and their requirements, to select the applications and business models which will support successful venture creation. This paper explores a number of key issues which surround these decisions and their relation to the changing business environment. It is concluded that the acceptability of novel technologies and products is mediated by systemic interactions which are ill–understood by industry and government.     

The co‐evolution of capabilities and transaction costs: explaining the institutional structure of production

This paper proposes that transaction costs and capabilities are fundamentally intertwined in the determination of vertical scope, and identifies the key mechanisms of their co‐evolution. Specifically, we argue that capability differences are a necessary condition for vertical specialization; and that transaction cost reductions only lead to specialization when capabilities along the value chain are heterogeneous. Furthermore, we argue that there are four evolutionary mechanisms that shape vertical scope over time. First, the selection process, itself driven by capability differences, dynamically shapes vertical scope; second, transaction costs are endogenously changed by firms that try to reshape the transactional environment to increase their profit and market share; third, changes in vertical scope affect the nature of the capability development process, i.e., the way in which firms improve their operations over time; and finally, the changes in the capability development process reshape the capability pool in the industry, changing the roster of qualified participants. These dynamics of capability and transaction cost co‐evolution are illustrated through two contrasting examples: the mortgage banking industry in the United States, which shows the shift from integrated to disintegrated production; and the Swiss watch‐manufacturing industry, which went from disintegration to integration. Copyright © 2005 John Wiley & Sons, Ltd.     

Concurrent Engineering Practices in Selected Swedish Companies: A Movement or an Activity of the Few?

Speed-to-market is currently becoming a highly competitive issue for manufacturing companies around the world, and much as been written about the potentials hidden in the product development process. The solutions most often called for usually include activities such as Time-Based Competition, Concurrent Engineering, and Early Manufacturing Involvement. The research and management literature on this topic usually draws upon a few well-known and well-cited successes, found at companies such as AT&T, Xerox, and Motorola. However, a lack of broad-based research on the topic has made it difficult to establish whether the shift in competitive priorities and assorted process improvements represent a broad movement in the industry, or whether observed changes merely depict changes found in a few successful, technology-based companies. In this article, Lars Trygg presents some early findings from a broad-based survey (109 cases) within the Swedish manufacturing industry. The results indicate that a substantial part of the Swedish manufacturing industry has implemented a number of actions and methods associated with successful projects reported in the media, in order to increase their speed to the market.