Preparing for distant collaboration: Antecedents to potential absorptive capacity in cross-industry innovation

Cross-industry innovation entails distinctive innovation opportunities and challenges according to the knowledge heterogeneity between the collaborating firms. This heterogeneity yields increases in organizational-level cognitive distance. Whereas recent theory suggests cognitive distance is positively related to exploratory innovation, too much distance can hinder efficient knowledge absorption and results in a reduced effect on novelty value. This paper focuses on the research question of how to build potential absorptive capacity for distant collaboration beyond established industry boundaries to gain radical rather than incremental results. To address this question, we mapped a cross-industry network using survey data on 215 bilateral cross-industry collaborations between firms from a variety of industries and captured cognitive proximity (the inverse of distance) in terms of overall knowledge redundancy between firms. This approach introduces a new method to infer organizational-level cognitive distance from network analysis. Subsequently, based on results from the network analysis, we examined coordination antecedents to potential absorptive capacity for cross-industry innovation with partners at moderate and high distance applying case study analysis. Our study revealed three alternative approaches to coordination antecedents that drive a firm?s potential absorptive capacity for distant collaboration. These findings extend research on absorptive capacity to the field of cross-industry innovation.     

Emergence of innovation networks from R&D cooperation with endogenous absorptive capacity

This paper extends the existing literature on strategic R&D alliances by presenting a model of innovation networks with endogenous absorptive capacity. The networks emerge as a result of dynamic cooperation between firms occupying different locations in the knowledge space. Partner selection is driven by absorptive capacity which is itself influenced by cognitive distance and R&D investment allocation. Under different knowledge regimes, we examine the structure of networks that emerge and how firms perform within such networks. We find networks that exhibit small world properties which are generally robust to changes in the knowledge regime. Certain network strategies such as occupying brokerage positions or maximising accessibility to potential partners pay off, especially in ‘young’ industries with limited involuntary but abundant voluntary spillovers. This particular result is driven by endogenous absorptive capacity.     

Configuring absorptive capacity as a key process for research intensive firms

Absorptive capacity is a dynamic capability which creates new firm resources by searching, acquiring, assimilating, transforming and exploiting external knowledge with internal resources and act as a process framework for innovation. Despite being one of the most frequently cited strategic management concepts, absorptive capacity as a dynamic capability has limited empirical evidence with unverified assumptions. The concept is at risk of reification. With this study we contribute to the literature by providing empirical evidence for absorptive capacity which challenge the assumptions of how the construct is configured. We follow the strategic factor of intellectual property rights (IPR) in European biopharmaceutical firms using a qualitative process study with temporal bracketing. By tracking IPR, we found evidence for absorptive capacity in all firms we studied, but the process framework in use is different to Zahra and George’s (2002. Acad. Manage. Rev. 27, 185–203) and Todorova and Durisin’s (2007. Acad. Manage. Rev. 32, 774–786) theoretical models. Based on our evidence and literature review we develop some theoretical insights and propose a modified absorptive capacity model. This new model puts a greater emphasis on assimilating knowledge from outside the firm and provides more clarity on how research intensive firms might use absorptive capacity.     

The relationship between knowledge search strategies and absorptive capacity: A deeper look

The present study analyzes how the breadth and depth of search strategies affect the dimensions of a firm's absorptive capacity: exploration, transformation and exploitation. Results of an analysis of a sample of 467 Spanish manufacturing firms reveal that openness of external knowledge search contributes to firms' exploratory, transformative and exploitative learning processes in different ways. In particular, a strong curvilinear effect of external knowledge search breadth on exploratory and exploitative learning was found. It is also important to establish deep relationships with external agents to achieve transformative and exploitative learning up to a certain point after which relationships become negative. Interestingly, for a firm to develop explorative learning, it is not important to establish deep relationships. And for a firm to develop transformative learning it is not important to establish broad relationships. Some suggestions for managers and future lines of research are provided.     

Collaborative modes with Cultural and Creative Industries and innovation performance: The moderating role of heterogeneous sources of knowledge and absorptive capacity

Organizations can no longer be isolated entities in the current dynamic competitive environment but tend to establish alliances and networks with external parties. Recently, research has suggested that organizations develop collaborative modes with Cultural and Creative Industries (CCIs) to acquire and combine Heterogeneous Sources of Knowledge (HSK) within their organizational environment. Innovation thus becomes increasingly generated by a cross-process involving a diverse set of industries. Nevertheless, few studies have assessed how knowledge from distant industries, such as CCIs, can affect firms’ innovation performance. Accordingly, this empirical research on a sample of 187 firms evaluates whether formal and informal collaboration modes with CCIs affect innovation performance. Moreover, it assesses the moderating role of both HSK and absorptive capacity. In particular, it aims to answer the following questions. What are the effects of collaboration modes with CCIs on firms’ innovation performance? What are the differences (in terms of effects) between Formal Collaboration Modes (FCMs) and Informal Collaboration Modes (ICMs) with CCIs on firms’ innovation performance? Do heterogeneity of knowledge sources and absorptive capacity increase the possibility of benefiting from FCMs and ICMs with CCIs in terms of innovation performance? The results contribute to the theory indicating that HSK are important to benefit from knowledge from CCIs, while absorptive capacity does not fulfil the same role.     

Social innovation with open source software: User engagement and development challenges in India

A diverse range of innovative solutions based on Free-and-Open-Source Software (FOSS) have been developed for marginalized communities in developing countries. It has been suggested that such small-scale and home-grown solutions (e.g. mobile phone apps), usually championed by social enterprises (SEs), are more likely to introduce pro-poor change than infrastructure heavy ICT initiatives designed by state and other international actors. In the Indian context, FOSS-based social innovations (SIs) introduced by SEs are helping poor communities tackle previously thought-to-be unresolvable socio-economic problems. An interesting question, therefore, would be: in what ways is the SE model and approach uniquely equipped to develop FOSS-based SIs that deliver pro-poor change? The empirical component of the research attempts to shed light on this question by uncovering the nuts and bolts of the development methodology deployed by an SE during the coding and launch of an FOSS-based SI. Findings highlight the significant role of the founder's social vision; the challenges of accurately capturing and translating to software developers the nature and nuance of social problems; and, the incumbent issues in putting together a methodology that creates active user engagement throughout the software development process, overcoming difficult barriers such as language and culture.     

Supply-management maturity, cost savings and purchasing absorptive capacity: Testing the procurement–performance link

The relationship between the development level a purchasing organisation has reached—maturity—and its impact on the performance of a firm has received only limited attention until now. We conducted extensive purchasing audits using a comprehensive tool to assess firms’ maturity level. These firms’ performance was then measured by their success in a purchasing cost-reduction programme. The results showed a highly significant relationship between purchasing's maturity level and cost-reduction results. Somewhat counter-intuitively, larger saving potential was identified in more developed firms. This finding may be explained by a new concept called “purchasing absorptive capacity”. If an organisation's maturity is too low, the introduction of best practices, such as an innovative cost-reduction method, may fail.     

Absorptive capacity, its determinants, and influence on innovation output: Cross-cultural validation of the structural model

The main purpose of this study is to provide stronger quantitative evidence in the field of organizational absorptive capacity research by using a more direct measure of absorptive capacity and a wide range of variables in a cross-nationally tested structural model. The results show that there exist two kinds of absorptive capacity: demand-pull and science-push. Their most important determinants proved to be internal R&D, training of personnel, innovation co-operation and attitude toward change. Both kinds of absorptive capacity are positively related to product and process innovation output. Therefore, absorptive capacity is to be given more attention in the future research and innovation policy considerations.     

企业核心能力与创新能力的关联分析

企业核心能力与创新能力之间相互联系、相互影响.其中,企业核心能力是开展创新和形成创新能力的基础,创新能力和创新过程是形成核心能力的关键.在企业创新能力系统中,管理创新能力处于中心地位,对企业创新能力产生支持、整合和催化作用,是形成企业核心能力的基本途径.只有弄清企业核心能力与创新能力之间的连动关系,才能为企业创新能力的提高和核心能力的增强奠定坚实的基础.     

Can supplier innovations substitute for internal R&D? A multiple case study from an absorptive capacity perspective

Prior literature suggests that significant internal R&D resources are needed to leverage suppliers for innovation and that external knowledge sources can be used to complement the internal knowledge base. Based on the analysis of four inbound open innovation projects at Fortum, a multinational energy utility company, we argue that companies with low R&D intensity may adopt an alternative approach which aims at substituting – not merely complementing – internal R&D with external innovations. We adopt the absorptive capacity perspective while investigating the cases and focus on four distinct capabilities: acquisition, assimilation, transformation, and exploitation. We find that the substitution approach consists of short-term research on new technological areas in order to gain the ability to identify and evaluate alternative technologies, as well as joint business models and operations based on complementary capabilities between the parties. The cases also suggest that the innovation process requires significant collaboration and the buying company's supplier management capabilities may improve the success of inbound open innovation projects of this type.     

技术外溢与吸收能力:基于开放经济下的内生增长模型分析

通过构建中间产品种类扩张型的内生增长模型,本文探讨了开放经济条件下技术外溢与本国技术吸收能力影响长期经济增长的内在机理。对模型的竞争性市场均衡分析得到了均衡增长路径的稳态增长率,并就解的政策含义进行了讨论。模型的基本结论是：技术吸收能力的提高、人力资本积累以及适度的知识产权保护有利于长期经济增长,然而贸易开放度、技术水平差距对稳态增长率的影响效应具有不确定性。     

Collaborative-based HRM practices and open innovation: a conceptual review

Abstract

This conceptual paper analyses the role of collaborative-based HRM practices in supporting open innovation. There is already an extensive literature that investigates the impact of HRM practices on organizations’ innovation performance. As organizational boundaries become increasingly permeable and knowledge flows more freely, open innovation continues to receive close attention in management studies. However, relationships between HRM practices and open innovation have still not been examined. From a knowledge management perspective, we identify three kinds of barrier that may deter or impede open innovation. These relate to cognitive biases, concerns about transaction costs, and shortfalls in terms of organization capability. We also discuss the role of four types of collaboration-oriented HRM practices (i.e., teamwork-based recruitment, training in teamwork skills, team-based appraisals and rewards, and rotational job design) in reducing barriers to open innovation. Based on our analyses, we envisage future research directions about the role of collaborative-based HRM practices in supporting open innovation.     

Relationships among open innovation,innovative performance,government support and firm size: Comparing Brazilian firms embracing different levels of radicalism in innovation

This work extends knowledge concerning the relationships among open innovation, innovative performance and government support for innovation within Brazilian firms. Data were obtained from two different firm samples (Sample A, on incremental innovation, and Sample B, on radical innovation). The main research results are as follows. First, in considering government support for innovation, Sample B, based on radical innovation, played a superior and stronger role than Sample A. Secondly, for both samples, the cooperation of external firms has a positive effect on firms’ innovative performance, which was positively controlled by the size of the firms. Thirdly, in general, radical innovation requires synergy and a more intense focus regarding the constructs considered therein. This work also adds value in methodological terms, as this is the first research to have tested different models of samples with different levels of radicalism in innovation.     

Exploratory and exploitative innovation: To what extent do the dimensions of individual level absorptive capacity contribute?

Individuals are considered the frontline that allows firms to learn from external sources. However, a firm can only benefit from individual efforts if it understands to what extent the dimensions of individual-level absorptive capacity are related to its innovation strategy. A firm's innovation strategy is characterized by the notions of exploration and exploitation, which result in either radical or incremental innovation. This study examines the driving factors of individual-level absorptive capacity regarding a firm's exploration versus exploitation strategy. Using quantitative data from 104 individuals, partial least squares structural equation modeling (PLS-SEM) analysis was conducted, verifying individuals' competencies in identifying external knowledge as a trigger for both exploratory and exploitative innovation. Consequently, these specific abilities also contribute to organizational ambidexterity. Furthermore, the results show the dichotomous contribution of individual competencies in assimilating external knowledge. While exploratory innovation thrives with individual assimilation efforts, realization of exploitative innovation is not significantly related to these efforts. Ultimately, individuals' competencies in utilizing external knowledge are significantly related to neither exploratory nor exploitative innovation. Moreover, this study provides means for managers to systematically position individuals in the external search process.     

Meta-organizing for open innovation under environmental and social pressures in the oil industry

Scholars have yet to address why and how open innovation model can be applied effectively within industries while diminishing its potential cost and challenges. In this paper, we extend open innovation model both theoretically and practically by identifying a) the boundary conditions that motivate firms within resource-based industries to apply the model and b) the approaches that have been implemented in practice in applying the model. In this multiple-case study, we explore why and how firms within the upstream Canadian oil industry have evolved to apply open innovation model over time to deal with the industry's challenges. First, our findings show that institutional forces, both normative and coercive—such as social and environmental pressures, were the primary drivers for adopting open innovation. Second, by building on the taxonomy of meta-organizations, we demonstrate that an industry-founded and not-for-profit innovation intermediary, as a meta-organization, is a necessary tool to address problems of adopting open innovation. We argue that the experiments of the upstream oil industry to develop a suitable organizational design for such innovation intermediaries suggest that a moderate level of stratification accompanying either close or open membership is the most suitable design. The findings from this study can be helpful to other industries, particularly other resource- based industries, which seek to effectively employ the open innovation model through innovation intermediaries.     

Outbound open innovation in bio-pharmaceutical out-licensing

Our study investigates the outbound open innovation of firms engaged in technological venturing. Leveraging insights from the sociology theory and innovation literatures, we clarify whether social status helps entrepreneurial ventures overcome market imperfection and information asymmetry in out-licensing and illustrate the importance of specific aspects of social status building in this context. We also examine the effect of failure experiences on out-licensing. We take a dynamic view of desorptive capacity by studying an entrepreneurial venture’s learning process, both internally, in terms of its own technology trajectory, and externally, through inter-organizational alliances. We apply a negative binomial model to our novel panel of 180 firms studied over an 18-year period with controls for stocks of clinical development activities, patenting and prior licensing activities. Empirical analysis enables us to observe the impact which the firms’ technological and development status, reputation and desorptive capacity exert upon out-licensing volume. Prior outbound open innovation studies do not account for the heterogeneity of technology and R&D success and failure experiences observed in our study. We also demonstrate the contingency effect of external learning from alliances during the building-up of a firm’s desorptive capacity, or the way in which the number of co-authoring partners in scientific publications negatively moderates the positive effect of the number of commercial alliances on the volume of its out-licensing deals. Our findings contribute to the understanding of external knowledge exploitation and complement important aspects of the literatures on outbound open innovation and desorptive capacity, offering empirically rich insights for bio-pharmaceutical firms into the drivers behind volumes of out-licensing deals.     

Neither invented nor shared here: The impact and management of attitudes for the adoption of open innovation practices

Despite the massive interest in open innovation, limited attention has been expressed concerning the intra-organizational challenges in implementing it. An exemplary issue is the unwillingness of employees to undertake extra-organizational knowledge transactions in the form of negative attitudes against the sourcing of external knowledge (the not-invented-here (NIH) syndrome) and against the external exploitation of knowledge assets (the not-shared-here (NSH) syndrome). Using survey data collected from 331 firms, this article empirically assesses the theoretical assertion that the NIH and NSH syndromes have negative impacts on the adoption of inbound and outbound open innovation. Furthermore, it investigates how their effects can be reduced through competence-building programs based on the training of employees. By focusing on two attitudinal antecedents to openness, the findings offer an explanation for the problems that firms face in benefiting from inflows and outflows of knowledge and possible guidance as to how managers can disengage such attitudes.     

The role of openness in the fuzzy front-end of service innovation

The early stages of innovation involve high levels of uncertainty, leading to it being labelled as the “fuzzy-front end” (FFE). Although openness has been identified as pivotal to innovation performance in the open innovation literature, little effort has been put into exploring its role in the FFE. Specifically, this study examines ‘openness competence’ within the FFE–i.e., the ability of a FFE team to explore, gather and assimilate operant resources from external sources by means of external searches and inter-organisational partnerships. The aim is to investigate the impact of openness competence on front-end uncertainty reduction and service innovation success. Data were obtained from a survey of 122 IT-based service innovation projects implemented by IT service provider firms in Thailand. The results suggest that openness competence positively influences both the degree of uncertainty being reduced during the FFE and the overall success of service innovations. These findings offer several implications for research on open innovation and the FFE as well as encouragement to managers to apply a more open approach to the FFE of their service innovation projects.     

Moving beyond the tensions in open environmental innovation towards a holistic perspective

This paper analyses factors determining open environmental innovation (EI) and explores the possibility of embracing their tensions to achieve integrated environmental strategic goals. Building on recent literature linking open innovation and EI, the study assumes open EI strategic goals as a multidimensional construct based on the “synergistic and interwoven nature” of four identified enabling factors, that is, partners, knowledge, benefits, and motivations. A fuzzy‐set qualitative comparative analysis (fsQCA) based on Boolean algebra is conducted to analyse a set of 186 European companies operating in the telecommunication and information and communication technology (ICT) service industries. Making important theoretical, managerial, and policy contributions, this paper offers insights into the key factors enabling open EI and the tensional relationships within and between them. In doing so, it captures the non‐linear effects among these factors and the strategic goals related to an open EI strategy. It also suggests how the paradox theory might help in addressing the tensional dilemma of open EI strategy.