Firms' open innovation policies,laboratories' external collaborations,and laboratories' R&D performance

The value of the open innovation approach is now widely recognized, and the practice has been extensively researched, but still very little is known about the relative impact of firm‐level and laboratory‐level open innovation policies and practices on R&D performance. This study attempts to measure that impact by analyzing a sample of 203 laboratories of Japanese firms located in Japan. It examines simultaneously the effects of firm‐level open innovation policy and laboratory‐level external collaborations on laboratory R&D performance. The study aims to go beyond a general understanding of the importance of open innovation; it shows how an open innovation policy can have a positive and significant effect on collaborations between a laboratory and local universities or business organizations. The results also show how an open innovation policy can contribute to the laboratory's R&D performance by facilitating external collaborations by the laboratories. It demonstrates how these factors affect R&D performance in different ways, depending on the type of R&D tasks. Our findings suggest several theoretical and practical implications in the field of R&D management.     

Business Strategy, R&D Management and Environmental Imperatives

Abstract
Environmental imperatives are seen by many business leaders to represent a major issue for the 1990's and beyond. The debate about the environmental sustainability of economic activity has important implications for the development of business and places considerable emphasis on the need for planned corporate change. The strategic significance of the environment is particularly critical to R&D as this is characterised by long planning horizons and provides the setting for the development of future products and processes.
The purpose of this paper is to examine the connections between environmental imperatives, strategic change and R&D management. To this end the paper reviews the strategic nature of environmental pressures on business. From this base, consideration is given to the responses required by business, in meeting these pressures. The paper concludes by suggesting that the application of management techniques in concert with organisational change is needed for R&D management to build environmental considerations effectively into innovation. These suggestions can be used to gauge how far individual businesses have developed the systems and structures to enable them to move towards sustainability. The implication of the paper is that R&D management will not only need to apply new management techniques but will have to play a leading role in innovative organisational structures in order to fulfil the full potential of environmentally sensitive products and processes.     

Performance measurement in R&D: exploring the interplay between measurement objectives, dimensions of performance and contextual factors

Measuring research and development (R&D) performance has become a fundamental concern for R&D managers and executives in the last decades. As a result, the issue has been extensively debated in innovation and R&D management literature. The paper contributes to this growing body of knowledge, adopting a systemic and contextual perspective to look into the problem of measuring R&D performance. In particular, it explores the interplay between measurement objectives, performance dimensions and contextual factors in the design of a performance measurement system (PMS) for R&D activities. The paper relies on a multiple case study analysis that involved 15 Italian technology-intensive firms. The results indicate that firms measure R&D performance with different purposes, i.e. motivate researchers and engineers, monitor the progress of activities, evaluate the profitability of R&D projects, favour coordination and communication and stimulate organisational learning. These objectives are pursued in clusters, and the importance firms attach to each cluster is influenced by the context (type of R&D, industry belonging, size) in which measurement takes place. Furthermore, a firm's choice to measure R&D performance along a particular perspective (i.e. financial, customer, business processes or innovation and learning) is influenced by the classes of objectives (diagnostic, motivational or interactive) that are given higher priority. The implications of these results for R&D managers and scholars are discussed in the paper.     

Toward the development of benchmarking tools for R&D project management

This paper presents an audit model for the process of R&D project management that can be used to check the robustness and repeatability of processes and provide a template for internal and external benchmarking. The intention is to offer a 'fine-grained' model focusing rather closely on the R&D activities within the broader innovation process, thus complementing the more widely based innovation audit models that already exist.
Based on field-work in six business units in ICI and five companies from other industries, the paper sets out three major variants of the R&D project management process. These variants reflect the fact that R&D projects take place in different circumstances and have different objectives.     

Creating value while avoiding its destruction through R&D management and innovation

Value creation and capture remain a key but quite a challenging objective for many organizations. R&D and innovation management have to operate in a context of increasing complexity, particularly enriched by emerging technologies, new opportunities for transformation of business models, and multidimensional changes in market demands. This special section proposes new options to deal with this challenge. One paper contributes to the adoption of open business models by studying their antecedents and casual relationships. The three other papers propose using a different focus on value, avoiding its destruction by adopting different unusual mindsets; i.e. learning through failure, learning by deviating and investigating motivations for not participating in innovation communities.     

Declared essential patents and average total R&D expenditures per patent family

The sharp increase in SEP declarations and declaring firms emphasizes the necessity for understanding firms’ innovation investment behavior in standardization. This paper empirically investigates whether declared standard-essential patents (SEPs) and the declaring firm’s business model (operationalized as a firm’s location in the value chain) are associated with a firm’s innovation investment behavior. To this end, we measure firms’ innovation investment behavior through average total research and development (R&D) expenditures per filed patent family for publicly listed firms from 1999 to 2018. Our sample mainly includes major SEP family declarants. We rely on a binary business model taxonomy differentiating upstream and downstream firms. Within that setting, total R&D expenditures rise with increasing fragmentation of declared SEP families, suggesting that firms adjust their R&D investments to declaration developments in standard-setting organizations (SSOs). We also show that upstream firms have significantly lower total R&D expenditures than downstream firms, which could indicate structural differences in their intellectual property (IP) and R&D management processes. Our results can help SSOs and regulators better understand firms’ innovation investment behavior.     

Managing academic R&D as a business at K.U. Leuven: context, structure and process

In this paper, we elaborate on how academic R&D can be managed as a business. Based on the case of K.U. Leuven Research and Development, it is shown how an academic institution can develop the context, structure and processes conducive to managing academic R&D as a business. It is argued that universities that intend to take advantage of the economic opportunities of their R&D programmes, should leverage their innovation potential through appropriate strategies, organizational structures and management processes that allow them to manage part of their R&D portfolio as a business without hampering though the fundamental academic values and activities of research and teaching. This balancing act has been the responsibility of K.U. Leuven Research and Development for the last 28 years. It is the subject of the case study reported in this paper.     

Measuring firms’ imitation activity

Although imitation is more abundant and prevalent than innovation in firms’ product and process development activities, it has been understudied in research on innovation and R&D management. For example, a valid and reliable objective firm-level measure of the intensity of imitation activity is lacking in the extant literature. This measure is necessary to understand the antecedents and consequences of firms’ imitation activity, which has implications for R&D management. In this paper, we present novel methods that employ patent infringement litigations data to improve on the validity and reliability of measuring firms’ imitation activity. We validate our proposed measure by presenting a first model and test of R&D as a multiple-output production function with R&D expenditure as the primary input, and innovation and imitation as joint outputs. This is in contrast to current R&D models as a single-output production function of either innovation or imitation. This study uses a sample of 227 public firms from the computer, semiconductor, and pharmaceutical industries in the United States during 1991–2010.     

Why and How Combining Strong and Weak Ties within a Single Interorganizational R&D Collaboration Outperforms Other Collaboration Structures

The purpose of this paper is to demonstrate why and how an ambidextrous interorganizational R&D collaboration outperforms other collaboration structures in the creation of innovation. This research effort contributes to a growing stream of research in social network theory suggesting that the contradictory theories of the strength of weak ties and weak network structures on the one hand and the theory of strong ties and closed network structures on the other have a mutually reinforcing effect on innovation outcomes if combined rather than considered separately. An in‐depth exploratory single case study approach within an innovatively organized national R&D collaboration allowed giving further evidence for such a superior innovation performance and for this research to contribute to theory by demonstrating why and how such a combination may lead to higher innovation output and how this effect can be actively reinforced. It is suggested that the combination of strong and weak ties should occur at the individual rather than at the project or firm level. The authors distinguish between the additive effects of the respective innovation benefits of strong and weak ties, a positive interaction effect in the portfolio of dyadic ties of an individual and a second multilevel interaction effect of weak ties embedded in the ambidextrous network structure. Referring to previous empirical findings, intellectual property regulation and structural interdependency between network members showed a higher impact than trust with regard to leveraging weak ties and are important sources for achieving the multilevel interaction effect. Managerial implications of this research are that a large network will outperform several smaller, independent networks given that the right structure and processes are in place. Direct implications for the architecture of an ambidextrous R&D collaboration are discussed, and a framework for a new form of technology R&D collaboration called “semi‐open organization” is presented, which places itself between the extremes of traditional R&D in closed organizations and completely “open innovation” approaches.     

New paradigms for the future: keynote perspectives from The R&D Management Conference 2008

The R&D Management Conference 2008 theme of ‘emerging and new approaches to R&D management’ sought to draw out how R&D‐based organizations today are changing the way they manage (in terms of novel approaches, techniques, models and tools) in face of the challenges and opportunities presented in the current environment. Six keynote presentations by executives, representing both the public and private sectors, elaborated on the following subjects reflecting their experiences on the theme: hyperconnectivity and changing R&D tenets, accelerating discoveries in human health via open access public‐private partnerships, role of government in bridging the innovation gap, building sustainability and innovation in a traditional resource sector, R&D management in the aerospace sector, and leveraging diversity to build a culture of innovation. Their presentations highlighted amongst other things – global trends that are affecting how R&D organizations are operating, economic imperatives driving change in business models, working through partnerships within an open innovation environment, and leveraging the diversity presented by an increasingly globalized R&D workforce for success. Within these presentations are also challenges to researchers to generate new thinking to address current and future problems presented by the R&D environment. The keynote perspectives are summarized in this paper.     

Innovation Process and Outcomes for Large Japanese Firms: Roles of Entrepreneurial Proclivity and Customer Equity

The authors investigate the structural relationships among entrepreneurial proclivity, innovation process characteristics (technological strength, marketing strength, and marketing–R&D integration), and customer equity in achieving business growth and financial return in the Japanese context. Following field interviews and a pilot test, survey data are collected from 207 pairs of marketing and R&D executives from strategic business units (SBUs) of large manufacturing companies in Japan. Based on the partial least squares analysis of data, the authors find nuanced effects of organizations' entrepreneurial proclivity on the critical organizational process, resource, and business performance. The study theorizes and empirically supports the idea that customer equity is a potent intermediary outcome that contributes to both top‐line (growth) and the bottom‐line (ROI) of a business. Specifically, the study shows that: (1) entrepreneurial proclivity directly and positively influences technology strength, marketing strength, and marketing‐R&D integration; (2) entrepreneurial proclivity's effect on business growth and financial return is positive and mediated by customer equity; (3) marketing–R&D integration has a moderating effect on the positive impact of technology strength on customer equity; and (4) customer equity is a strong driver of business growth and financial return. There is a dearth of research on entrepreneurship in Asia; very few empirical studies have been reported from Japan in particular. This study contributes to boundary testing of the theoretical relationships. Although entrepreneurial proclivity appears to be an inspirational concept, its actual adoption remains an important question for many Japanese companies. Those Japanese firms that aspire to be entrepreneurial need to be mindful what innovation processes and resources it takes to fulfill the positive influences of entrepreneurship.     

R&D management responses to the environment: current theory and implications to practice and research

The environmental problems faced by society are often regarded as global in importance. The global imperatives linked to environmental concerns pose critical questions about the international management of R&D. This theme is developed in this paper which was initially written as the basis for a workshop on R&D management responses to the environmental challenge held as part of the 1992 Conference on Managing R&D Internationally at Manchester Business School.
The paper considers recent literature on R&D management responses to the environmental challenge drawn primarily from English language sources out extending beyond traditional R&D management literature. The intention was to identify current theories about R&D management and the general business context for R&D and to consider the implications of environmental concerns for R&D management practice.
The paper suggests that R&D management and the environment is still at a relatively early stage of development. Nevertheless, there is a demonstrable gap between the approaches to environmental problems adopted by R&D practitioners and those chosen by R&D theoreticians. This mirrors a more general gap between theory and practice seen in the basic R&D management literature.
In general, R&D management and the environment has been constructed in the literature as a set of tools and techniques, rather than a strategic management issue. However, there is a developing body of literature which links R&D management and environmental management in a more strategic way and focuses on the need to consider organizational as well as technological change.
The paper concludes that an important way forward for research in this area is to establish an R&D Management and Environment Focus Group to bridge the gap between theory and practice and to explore the application of environmental concepts to R&D management.     

Antecedents of open innovation at the project level: empirical analysis of Korean firms

The concept of open innovation has recently gained wide academic attention, as it seems to have significant impact for company performance. Most empirical investigations about this emerging concept have been case studies of successful early adopters of open innovation, and their analyses have largely been at the company level. Although case studies at that level provide meaningful implications, the new phenomena merit a more in‐depth examination: that is, we need to collect and analyze data on multiple companies to explore more systematic findings about open innovations across companies. Moreover, analyses may need to go down to the individual project rather than the whole company level because innovation activities are often conducted as part of research and development (R&D) projects. To meet these needs, this study examines companies' open innovation efforts at the level of the individual R&D project. Specifically, the present study focuses on project‐level openness to better understand the mechanisms of open innovation. It explores systematic relationships between various antecedent factors and the degree of openness. Project‐level openness could be affected by team and task characteristics, such as team size, learning distance, strategic importance, technology and market uncertainty, and relevance to the main business. Relevant data collected from 303 companies in Korea were used to identify the antecedents that affect inbound and outbound openness. The research findings are expected to help provide a concrete theoretical framework suited for more generalized application and further practical development of open innovation strategy.     

Principal researcher and project manager: who should drive R&D projects?

In this paper, it is analyzed the hypothesis that in R&D the principal researcher (PR) is accepted as the coordinator or project manager (PM), carrying out the search for financing and to manage contracts, resources, cost, time, scope, risk and uncertainty, communication, stakeholders and so on, in addition to internal research activities. Thus, this study tries to verify this hypothesis through a major literature review in different types of projects developed by university, but also with a look to industry and industry-university cooperation. Two case studies are also analyzed, centered in its R&D project management maturity level. It is concluded that there is an important issue in projects’ success and in the time spent by PR in management, work for which they are under trained; while at the industry there is a greater approach to project management by the proximity of the innovation projects to other industrial projects. Following these initial findings and according to the case study results, it is proposed that R&D Projects in universities would be separated into two synergistic knowledge areas: R&D Management and Project Management. It is also recommended to allocate them to two distinct roles, where they could add value to R&D through their better knowledge and skills.     

The growth and management of R&D outsourcing: evidence from UK pharmaceuticals

Outsourcing of research and development (R&D) activities has become a major management issue for R&D and technical managers within firms. It has also been of growing concern to academics who are trying to chart the implications of the increasingly distributed nature of research and innovative activities in advanced economies. This study is based on a survey of research-based pharmaceutical companies operating in the United Kingdom conducted in 2004–2006. The aim of this paper is to outline the main reasons for pharmaceutical firms to outsource R&D and the management practices followed by such companies in relation to outsourcing. The research results provide interesting findings in relation to, for example, the reasons behind outsourcing, the decision-making processes behind such practices and barriers to outsourcing arrangements. These issues are evaluated together with the characteristics of the firms and the specific project outsourced.     

Mapping the invisible colleges of R&D Management

R&D Management has consistently been considered one of the top technology and innovation management journals since its inaugural issue in 1970. The purpose of this paper is to use bibliometric techniques to examine R&D Management in four time periods, 1986–1990, 1991–1995, 1996–2000, and 2001–2005 in order to reveal changes in its intellectual base. Bibliometric research has illuminated the knowledge domains of several technology and innovation management journals including R&D Management Linton and Thongpapanl, but there has not previously been a comprehensive detailed analysis focused only on R&D Management . Using co-citation analysis, this paper identifies the invisible colleges (research networks) associated with publications in R&D Management . The results indicate that Cohen and Levinthal's absorptive capacity model dominates the final two periods. The conclusions suggest how the absorptive capacity model might be more effectively utilized in future R&D Management research.     

Profitability Goals,Control Goals,and the R&D Investment Decisions of Family and Nonfamily Firms

Research and development (R&D) investments can help build sustainable competitive advantages and improve firm performance. Nevertheless, managers also acknowledge the difficulties associated with managing R&D and the low chances of success of innovation programs. For this reason, researchers have long been interested in understanding how managers make R&D investment decisions. Research grounded in the behavioral theory of the firm suggests that a primary driver of R&D investment decisions is profitability: when profitability goals have not been met, managers are more likely to initiate a problemistic search through increasing R&D investments. While emphasizing profitability goals and their relationship with R&D investments, prior research largely downplays the role of goals beyond profitability that exist in a significant number of firms (family firms) that are owned and managed by family members whose primary concern is preserving their control over the organization. Research indicates that these family‐centered noneconomic goals lead family managers to minimize R&D investments and that the coexistence of multiple goals produces highly variable R&D investment behavior. Yet, how family‐centered goals for control and profitability enter decision‐making in family firms is not fully understood. In this study, we propose that family managers form distinctive reference points that capture supplier bargaining power and are used to evaluate the degree of external obstruction to their managerial control. The empirical analysis of panel data on 431 private Spanish manufacturing firms observed over the period 2000–2006 shows that the importance of profitability and control goals follows a sequential logic in family firms, such that family firms react more strongly to increasing supplier bargaining power when their profitability reference points have been reached. This study extends current understanding of the distinctive organizational processes engendered by family management in business organizations leading to new research opportunities at the intersection of the innovation management and family business literatures.     

Value Creation and Value Capture Alignment in Business Model Innovation: A Process View on Outcome-Based Business Models

Industrial manufacturers are innovating their business models by shifting from selling products to selling outcome-based services, where the provider (manufacturer) guarantees to deliver the performance outcomes of the products and services. This form of business model innovation requires a profound yet little understood shift in how value is created, delivered, and captured. To address this research gap, our study examines two successful and four unsuccessful cases of this shift. We find that effectiveness in business model innovation hinges on the three process phases that unfold in collaboration with the customers: value proposition definition, value provision design, and value-in-use delivery. We also find that that success is determined by the alignment of specific value creation and value capture activities in each phase: identifying value creation opportunities—agreeing on value distribution in value proposition definition, designing the value offering—deciding on the profit formula in the value provision design, and finally refining value creation processes—regulating incentive structures in the value-in-use delivery. Our process model contributes to the literature and practice on business model innovation by providing a thorough understanding of how alignment of value creation and value capture processes is ensured, whilst paying special attention to their interdependence and the interactions between provider and customer.     

Organizing for Inbound Open Innovation: How External Consultants and a Dedicated R&D Unit Influence Product Innovation Performance

Firms increasingly acquire technological knowledge from external sources to improve their innovation performance. This strategic approach is known as inbound open innovation. The existing empirical evidence regarding the impact of inbound open innovation on performance, however, is ambiguous. The equivocal results are due to moderating factors that influence a firm's ability to acquire technological knowledge from external sources and to transform it into innovation outputs. This paper focuses on a relevant yet overlooked category of moderating factors: organization of research and development (R&D). It explores two organizational mechanisms: one informal and external‐oriented (involvement of external consultants in R&D activities) and one formalized and internal‐oriented (existence of a dedicated R&D unit), in the acquisition of technological knowledge through R&D outsourcing, a particular contractual form for inbound open innovation. Drawing on a capabilities perspective and using a longitudinal dataset of 841 Spanish manufacturing firms observed over the period 1999–2007, this paper provides a fine‐grained analysis of the moderating effects of the two organizational mechanisms. The involvement of external consultants in R&D activities strengthens the impact of inbound open innovation on innovation performance by increasing marginal benefits of acquiring external technological knowledge through R&D outsourcing. Moreover, it reduces the level of inbound open innovation to which the highest innovation performance corresponds. Instead, the existence of a dedicated R&D unit makes the firm less sensitive to changes in the level of inbound open innovation, by reducing marginal benefits of acquiring external technological knowledge through R&D outsourcing, and increases the level of inbound open innovation to which the highest innovation performance corresponds. The results regarding the role of informal and formalized R&D organizational mechanisms contribute to research on open innovation and absorptive capacity, and also inform managers as to what organizational mechanism is recommended to acquire external technological knowledge, depending on the objectives that the firm pursues.