Entrepreneurial co‐creation: societal impact through open innovation

New open innovation initiatives, such as accelerators, living labs, social innovation labs and open labs, involve for‐profit and not‐for‐profit actors working closely together to co‐create both business value and societal impacts. However, there is a lack of theoretical underpinning to understand how and why co‐creation by actors generate different types of social value in the concurrent pursuit of business and social value. Adopting an inductive case study approach, we find that different types of entrepreneurs who co‐exploit co‐identify opportunities for co‐creation, generate potentially competing social and business values. We develop four propositions relating to how and why profit orientation and key resource contributions of entrepreneurs co‐identifying an opportunity to co‐create decide the nature of social value generated. We discuss avenues for future research and practical implications, underlying the importance of developing entrepreneurialism as ways to generate different social impacts through open innovation approaches, such as co‐creation.     

Write Code,Save Lives: How a Community Uses Open Innovation to Address a Societal Challenge

This study explores how a community uses open innovation over time to tackle a global societal challenge. we conduct an in‐depth case study of OpenMRS, an open‐source software community providing affordable medical record‐keeping software in developing nations. We develop a process model that describes how inbound, outbound, and coupled open innovation influenced the community through four discrete phases of community development. We explain how the founders’ vision led to the creation of the community, and how increasing community participation and community governance facilitated its growth. Interestingly, we found that economic opportunities made possible by open innovation may paradoxically create challenges to community sustainability. Ultimately, this study expands our understanding of open innovation communities in different settings, and their role in addressing societal challenges.     

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.     

Crowdfunding networks: Structure,dynamics and critical capabilities

Crowdfunding platforms – bringing together entrepreneurs, investors and customers – have grown rapidly over recent years. Crowdfunding networks are open, multisided markets that match founders and funders on crowdfunding platforms. The unique structure of these networks blends social and business networks and comprises a complex array of closer and more distant network relationships. Research investigating the characteristics of these open and highly dynamic network structures is in its infancy and capabilities critical to operating in them are under-explored. Thus, this study follows an abductive reasoning process to understand critical capabilities for influencing and orchestrating crowdfunding networks. It draws on a thematic content analysis of 1484 blog entries written by crowdfunding experts and a comprehensive review of (i) literature on crowdfunding networks and (ii) five literature streams dealing with dynamic capabilities in evolving network structures. As a substantial contribution, this research delineates a portfolio of four collaborative capabilities – visioning, dynamic business modelling, engaging, and attaining social continuity – essential for operating successfully in crowdfunding networks. These new collaborative capability sets assume a new understanding of agency as a continuum of managerial and collective agency, an understanding that is novel within the network management and the capabilities literature.     

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.     

Which Tangible and Intangible Assets Matter for Innovation Speed in Start‐Ups?*

The launch of the first product is an important event for start‐ups, because it takes the new venture closer to growth, profitability, and financial independence. The new product development (NPD) literature mainly focuses its attention on NPD processes in large firms. In this article insights on the antecedents on innovation speed in large firms are combined with resource‐based theory and insights from the entrepreneurship literature to develop hypotheses concerning the antecedents of innovation speed in start‐ups. In particular, tangible assets such as starting capital and the stage of product development at founding and intangible assets such as team tenure, experience of founders, and collaborations with third parties are considered as important antecedents for innovation speed in start‐ups. A unique data set on research‐based start‐ups (RBSUs) was collected, and event‐history analyses were used to test the hypotheses. The rich qualitative data on the individual companies are used to explain the statistical findings. This article shows that RBSUs differ significantly in their starting conditions. The impact of starting conditions on innovation speed differs between software and other companies. Although intuition suggests that start‐ups that are further in the product development cycle at founding launch their first product faster, our data indicate that software firms starting with a beta version experience slower product launch. The amount of initial financing has no significant effect on innovation speed. Next, it is shown that team tenure and experience of founders leads to faster product launch. Contrary to expectations, alliances with other firms do not significantly affect innovation speed, and collaborations with universities are associated with longer development times.     

How functional involvement affects the transformation of external knowledge into innovation outcomes

This paper aims at investigating organizational mechanisms through which firms involved in open innovation initiatives can acquire external knowledge, integrate it with the existing one residing in the diverse functional areas, and transform it into innovation outcomes. Following the knowledge transformation perspective, we use the notions of early‐stage and late‐stage functional involvement, and explain their mediating effects on a firm's innovation performance. Based on a sample of 131 international firms involved in open innovation projects, we find that high involvement of functions related to the early stage of the innovation process – notably new concept generation, research and development, and design and testing – fully mediates the effect of external knowledge transfer on innovation performance. Similarly, high involvement of functions related to the late stage of the innovation process – notably manufacturing, marketing, distribution, and logistics – has significant indirect effect on innovation performance but lower than that of early‐stage functional involvement. Furthermore, the empirical research reveals that early‐stage functional involvement mediates the positive effect of external knowledge transfer on late‐stage functional involvement. Theoretical and practical implications of our findings are discussed.     

The impact of leadership influence tactics and employee openness toward others on innovation performance

Despite the vital importance of leadership, employees, and their social interactions in the open‐innovation process, there is scarce evidence on the influence and connectedness of different sub‐firm levels related to open innovation. The aim of this study is to explore the influence of leadership influence tactics and employee openness toward others on innovation performance at the individual and team levels. We applied a multilevel analysis on a sample of 85 employees and their 15 direct supervisors/team leaders. We find that leaders’ building open‐innovation coalitions exhibits a positive cross‐level relationship with employee openness toward others and individual‐level innovative behavior, and also moderates the link between the latter two constructs. Additionally, the leaders’ building open‐innovation coalitions variable is positively related to the team‐level scope of innovations and the team‐level innovation implementation phase.     

From collaborative community to competitive market: the quest to build a crowdsourcing platform for social innovation

Crowdsourcing presents new opportunities to generate social innovation. However, many crowdsourcing social innovation initiatives struggle with turning their promising projects into sustaining platforms. We studied how to design crowdsourcing platforms for social innovation by building and examining a platform called travel2change. We illustrate a framework of crowdsourcing platform building blocks based on the evolution of our case study from a collaborative community to a competitive market. Thriving platforms have a clear purpose, they facilitate value‐creating interactions for well‐understood actors and build a valid business model. The insights reveal design principles to guide organizations that seek to leverage crowdsourcing for social impact.     

When Is Open Innovation Beneficial? The Role of Strategic Orientation

Various scholars have accomplished a great deal to better understand open innovation effectiveness. Case studies have detailed its performance effects, while other studies showed the effectiveness of an aspect of open innovation, such as collaboration with third parties, external technology commercialization, and cocreation. Though most studies report a positive relation between open innovation and innovation performance, some studies indicate possible negative effects. This has resulted in a call for research on what kind of organizational context suits open innovation best. This study therefore addresses two questions: (1) does performing open innovation activities lead to increased innovation performance, and to which aspects of innovation performance is open innovation most strongly related? (2) what is the moderating impact of various kinds of strategic orientation on the relation between open innovation and innovation performance? In this study, we investigate three types of strategic orientations: entrepreneurial orientation, market orientation, and resource orientation. In a survey among 223 Asian service firms, we first develop and test a comprehensive measurement scale for open innovation that captures the entire range of open innovation activities, including outside‐in activities, inside‐out activities, and coupled activities. The final scale comprises of 10 items and indicates to what extent a firm has implemented open innovation activities. Next, we study the relation between open innovation and innovation performance. The results indicate that performing open innovation activities is significantly and positively related to all four dimensions of innovation performance: new product/service innovativeness, new product/service success, customer performance, and financial performance. The impact of open innovation is not limited to a particular aspect of innovation performance; it positively affects a broad range of innovation performance indicators. Though open innovation is positively related to all four dimensions of innovation performance, the effect sizes are not equal. The impact on new service innovativeness and financial performance is relatively stronger. Regarding the influence of a firm's strategic orientation, we find that all significant moderation effects are positive. This suggests that, in general, having a more explicit strategic orientation enhances the effectiveness of open innovation. When comparing the three strategic orientations, entrepreneurial orientation strengthens the positive performance effects of open innovation significantly more than market orientation and resource orientation do. In turn, market orientation has a significantly stronger moderation effect than resource orientation. These findings provide empirical evidence of the context dependency of open innovation. Especially an entrepreneurial orientation, which is associated with proactive and entrepreneurial processes, seems to create a fertile setting for open innovation.     

Challenges of open innovation: the paradox of firm investment in open-source software

Open innovation is a powerful framework encompassing the generation, capture, and employment of intellectual property at the firm level. We identify three fundamental challenges for firms in applying the concept of open innovation: finding creative ways to exploit internal innovation, incorporating external innovation into internal development, and motivating outsiders to supply an ongoing stream of external innovations. This latter challenge involves a paradox, why would firms spend money on R&D efforts if the results of these efforts are available to rival firms? To explore these challenges, we examine the activity of firms in open‐source software to support their innovation strategies. Firms involved in open‐source software often make investments that will be shared with real and potential rivals. We identify four strategies firms employ – pooled R&D/product development, spinouts, selling complements and attracting donated complements – and discuss how they address the three key challenges of open innovation. We conclude with suggestions for how similar strategies may apply in other industries and offer some possible avenues for future research on open innovation.     

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.     

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.     

Sustainability,Social Media Driven Open Innovation,and New Product Development Performance*

Sustainability and social media use in open innovation play important roles in a firm's new product development (NPD) process. This research examines, in conjunction, the roles of sustainability and social media driven inbound open innovation (SMOI) for a firm's NPD performance, and further, takes a more refined approach by differentiating between different types of SMOI activities. To this end, this research develops and tests a conceptual framework, which predicts that (1) a firm's sustainability orientation (SO) is positively associated with its NPD performance, (2) customer focus (CF) partially mediates the SO–NPD performance link, and (3) particular SMOI activities moderate the CF–NPD performance link. The empirical results, using data from the Product Development and Management Association (PDMA)'s comparative performance assessment study, provide support for most of the framework. Notably, this research documents a positive link between SO and NPD performance, as well as a partial mediating role of CF. The results further suggest that social media driven open innovation activities focused on gathering market insights enhance CF directly, while social media driven open innovation activities that garner technical expertise enhance the link between CF and NPD performance. This paper bridges the separate literatures on sustainability and open innovation, and contributes to the NPD research. The findings suggest that managers should take a strategic approach to sustainability and embed it in the NPD process. Furthermore, managers should manage social media based open innovation carefully to fully benefit the firm during the front end and back end of NPD.     

Patented innovations developed in networks: The role of cultural looseness

The ongoing globalization tears down geographical barriers to knowledge sourcing, leaving cultural ones intact. Past research on developing innovations has largely neglected national culture or solely relied on cultural values. A recent body of research has emerged around cultural looseness – the strength of social norms and the degree of sanctioning within societies – and provided initial evidence on its importance for mastering creativity, an antecedent of innovations. However, the impact of cultural looseness on developing innovations in networks with diverse actors has not yet been tested. To this end, we develop a Multiple Indicator Multiple Causes (MIMIC) structural equation model and test it against empirical evidence from >1.25 million patented innovations. We find that in innovation networks, innovators based in culturally loose countries source knowledge of higher breadth and depth for developing innovations compared to innovators from culturally tight countries. We discuss our findings and – based on some study limitations – suggest seven streams for future research. We conclude with summarizing our contribution to theory on the impact of culture on innovation and our contribution to practice on helping managers to decide how to best source knowledge and thereby foster innovation.     

Open innovation ecosystem organizing from a process view: a longitudinal study in the making of an innovation hub

This paper uses process theory as a theoretical lens to analyze AstraZeneca's enactment of an open innovation initiative with the purpose of strengthening the firm's surrounding innovation ecosystem. Based on empirical data collected over 7 years, we develop a process model of open innovation enactment and explain how the initiative gradually transformed while maintaining its guiding principles, which were set from the start. In applying a process perspective, we highlight open innovation initiatives as dynamic and evolutionary – but not deterministic – developments. As such, we provide a comprehensive and more nuanced understanding of not only what open innovation is but also how it becomes. This study also contributes to the innovation ecosystem literature by theorizing how firms orchestrate innovation ecosystems through open innovation initiatives over time.     

Looking for a Needle in a Haystack: How to Search for Bottom‐Up Social Innovations that Solve Complex Humanitarian Problems

The worldwide increase in societal challenges is putting pressure on humanitarian organizations to develop sophisticated approaches to leverage social innovations in the humanitarian sector. Since humanitarian problems are complex problems, with the relevant knowledge being hidden, organizational search theory advocates the application of bottom‐up and theory‐guided search processes to identify the social innovations that solve these. Unfortunately, there has been no theoretical attention to understanding which approaches apply in this context. Further, established theory‐guided bottom‐up search processes, such as the lead user method, are unsuitable to the humanitarian sector, and we lack practice examples of adequate search processes. To start addressing this gap in theory and practice, procedural action research was done with the International Federation of Red Cross and Red Crescent Societies to develop a theory‐guided bottom‐up innovation search process for the real‐life humanitarian problem of recurring floods in Indonesia. It revealed that an innovation search process for this context must differ significantly concerning its objectives and the steps to be taken from the lead user method, which was used as a starting point. Further, a comparison of the technical quality and the social impacts of the identified social innovations with social innovations identified through a non‐theory‐guided bottom‐up search process (i.e., an innovation contest) suggests the superiority of this theory‐guided search process. With this conclusion and the insights derived throughout the development of the search process, this study makes important contributions to theory development in the social and open innovation literatures and delivers important recommendations for social innovation practice in the humanitarian sector.     

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.     

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.     

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.