Open innovation change agents in large firms: how open innovation is enacted in paradoxical settings

This paper theorizes how change agents in large firms enact open innovation with small firms. The open innovation change agent is highlighted as a key internal actor for the transformational work needed to put open innovation into practice. The paper presents an empirically grounded theoretical model of how these actors work, emphasizing the two activities of ‘anchoring’ and ‘navigating’, with the purpose of bridging the inside and outside of the corporation. In applying a paradox perspective on open innovation enactment, it is explained how these change agents act as both catalysts and guards for collaboration, continuously balancing different paradoxical demands. Theoretical and managerial implications in relation to these findings are discussed.     

How knowledge affects radical innovation: Knowledge base,market knowledge acquisition,and internal knowledge sharing

This paper examines how existing knowledge base (i.e., knowledge breadth and depth) interacts with knowledge integration mechanisms (i.e., external market knowledge acquisition and internal knowledge sharing) to affect radical innovation. Survey data from high technology companies in China demonstrate that the effects of knowledge breadth and depth are contingent on market knowledge acquisition and knowledge sharing in opposite ways. In particular, a firm with a broad knowledge base is more likely to achieve radical innovation in the presence of internal knowledge sharing rather than market knowledge acquisition. In contrast, a firm with a deep knowledge base is more capable of developing radical innovation through market knowledge acquisition rather than internal knowledge sharing. Copyright © 2012 John Wiley & Sons, Ltd.     

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.     

Solving the innovation problem in state-owned firms: The role of entrepreneurial orientation and high-commitment HR practices

Due to the inefficiency in utilizing the rich resources they have, state-owned firms in China are generally not competitive as private firms in developing innovation-related organizational capabilities. This study contributes to the existing literature by identifying an alternative mechanism that can potentially explain the negative association between state ownership and innovation capability. Specifically, this study suggests that state-owned firms have less competitive advantage in innovation because they lack entrepreneurial orientation. To provide a potential solution for this problem, this study examines an important but understudied firm strategy, high-commitment HR practices (HCHR), and investigates the roles it plays on enhancing innovation capability by promoting an entrepreneurial orientation in state-owned firms. More importantly, by studying the contingent effect of firm business nature, this study identifies the boundaries of the positive effect of HCHR.     

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

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

A new perspective on open innovation: established and new technology firms in UK bio‐pharmaceuticals

The aim of this paper is to explore open innovation (OI) implementation and its impact on firm innovation performance in sectors experiencing technological discontinuities. The paper employs the framework of inbound, outbound and coupled OI to identify processes reflecting sourcing, externalising and exchanging knowledge across organisational boundaries on upstream and downstream innovation activities and explores their impact on the innovation performance of new and established technology firms. The empirical setting is the UK bio‐pharmaceuticals sector during 1991 and 2001, a paradigmatic era of discontinous change and intensified OI implementation. First, our findings show that new technology firms (NTFs) and established technology firms (ETFs) differ in their extent and patterns of inbound, outbound and coupled OI, reflecting that they implement OI to manage their competences in light of technological change. Second, we identify a complex and multifaceted relationship between OI and patenting performance, with NTFs experiencing enhanced performance from some OI processes while ETFs experiencing challenges. The paper suggests that delineating OI into inbound, outbound and coupled, along upstream and downstream activities, offers a deeper understanding of the role of OI in innovation, guiding selective implementation in pursuing enhanced innovation performance during periods of discontinuous technological change.     

Evaluating internal and external knowledge sources in firm innovation and productivity: an industry perspective

Both internal knowledge – investment in internal R&D and information and communication technologies (ICT) as well as external knowledge – knowledge spillovers and active collaboration with partners are rapidly fostering firm productivity and innovation. In this study, we investigate the role of internal and external knowledge in firm productivity and innovation. In addition, we test interactions between investment in R&D and ICT as well as between knowledge spillovers and knowledge collaboration in their association to firm innovation and productivity. We use a recombinant innovation approach and four samples for firms in manufacturing, creative, ICT and science, and professional services industries during 2002–2014 and for pre-and post-crisis periods to perform our analysis. In addition to innovation and productivity, we also examine the role of internal and external knowledge as a conduit to the development of innovation internally and the co-creation of innovation with external partners. Our results lead to managerial and policy implications.     

Coopetition and product innovation performance: The role of internal knowledge sharing mechanisms and formal knowledge protection mechanisms

Coopetition is an important new product development strategy; yet, studies addressing the impact of collaboration with competitors on product innovation performance provide mixed evidence. Conducting Tobit analyses on a sample of 627 manufacturing firms that responded to the fifth wave of the Flemish Community Innovation Survey, we find that the innovation performance implications of competitor collaboration depend on fine-grained intra-organizational design characteristics. In particular, our results show that competitor collaboration has a significant positive impact on product innovation performance only when internal knowledge sharing mechanisms and formal knowledge protection mechanisms are present. These findings contribute to the emerging contingency perspective on coopetition and provide specific recommendations to managers that are involved in coopetitive endeavors.     

Applied customer knowledge in a manufacturing environment: Flexibility for industrial firms

Dynamic business markets are forcing B2B marketers to create flexibility in their firms. The present study investigates: (1) made-to-stock (MTS) versus made-to-order (MTO, which is considered more flexible); (2) production technology routineness (with nonroutine considered more flexible); and (3) a marketing-based enabler of flexibility, i.e., applied customer knowledge. SEM analysis shows that applied customer knowledge completely mediates the relationships of both MTO and routineness with financial performance. This delineates two routes to financial performance, beginning with manufacturing-based flexibility constructs and operating through marketing-based applied knowledge. In addition, exploratory analysis of a subsample confirmed empirically that the financial success of mass customization depends on extensive customer knowledge application and low finished goods inventory levels. Managerial implications are discussed, along with ideas for future research.     

Open data for open innovation: managing absorptive capacity in SMEs

Open Data (OD) utilisation has been encouraged by governments because of its potential to fuel digital innovation. Despite this, there is a paucity of study into the role of OD for SMEs, in contrast to the growing literature that has focused on the collection and sharing of OD by the public sector. As such, our study contributes to open innovation research by analysing the main capabilities needed to overcome existing barriers to successfully manage OD in SMEs. Building upon the recent SME-oriented OI literature and adopting an interpretative absorptive capacity framework, we analyse the data collected from 30 semi-structured interviews with experts working in UK organisations adopting OD-based OI strategies. We find a number of core factors that shape OD acquisition, assimilation, transformation and exploitation by SMEs. Results show that without the specific OD capabilities identified in our study, it will be difficult for SMEs to successfully use OD, which may explain why the uptake of OD by SMEs more broadly has so far been limited. These unique OD capabilities need to be better developed by OD using SMEs, if this ‘raw material’ for the digital economy is to be fully exploited.     

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

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

Definition of innovation projects in small firms: A Spanish study

Small and medium‐sized enterprises (SMEs) are the main holders of the European economy and innovation projects are essential tools for SMEs to ensure their growth. A high percentage of innovation projects implemented by SMEs lacks planning and initial management, which causes the appearance of important problems for the SMEs survival. The authors have confirmed with a field study of 72 Spanish small firms that a lot of these problems arise from an incomplete project definition, so it is necessary to help SMEs to have a specific methodology that is appropriate to their own characteristics and projects. The statistical analysis shows how the project management knowledge helps to a better project definition, contributing to the project alignment with the company strategy. Also, it reveals other problems related to the project definition as planning, budget, market and financing. Of this analysis, it concludes that the definition phase supports the other phases and is essential in order to achieve project success. This paper presents an ‘integration model of factors’ that helps SMEs in the management of the definition phase of their innovation projects. This model relates the various areas of analysis needed to ensure their integration at the project definition. The relationships between the different model areas have been defined, showing the way to integrate the technical, economic and strategic outlooks of project objectives management in the definition phase of the project. This model has been implemented in 21 new innovation project definitions. The users' valuation has been very positive with a 90.4% of success and all of the model users are interested in implementing the model again in next projects. The main advantages highlighted were user‐friendliness, intuitive model and easy application.     

Lessons in product innovation: A case study of biotechnology firms

Firms that are able more quickly than others to add value through product development will be the winners in technology-based industries. This paper examines value-added progress by contrasting four agricultural biotechnology firms that have managed to create value with one that failed to do so. Lessons were induced for new firms struggling to develop products in emerging industries such as biotechnology. The following findings emerged from manager interviews and secondary data. In contrast to the ‘progressive’ firms, the failed firm neglected to develop a clear product-market focus, complementary skills outside its core technology, and relationships with universities and government. These contrasts seemed to stem from differences in the financing arrangements and the level of organizational politics. The failed firm received a generous one-time funding and had a relatively high level of politics, whereas the funding of the progressive companies was tied to performance milestones and little politicking took place. The reasons for organizational politics are discussed.     

Inbound open innovation for enhanced performance: Enablers and opportunities

Open innovation, defined as a firm's purposive pursuit and integration of external inputs for new product development, offers an alternative perspective on innovation. Drawing on resource-based and capability theories, this study identifies key factors that enable inbound open innovation and increase its efficacy in a business-to-business context. Because open innovation relies on external connections, relational capability—that is, the firm's ability to make and manage relationships with other firms—should enhance the effects of inbound open innovation on firm performance. Two key resources may further enhance the moderating effects of relational capability: network spillovers that indicate knowledge-rich surroundings, and flexibility that allows for responsiveness and adaptability. The authors test these relationships with data from managers in 204 business-to-business high-tech firms, as well as secondary data pertaining to firm performance and flexibility. The results support the expectations that the ability to build interfirm relationships in a knowledge-rich environment increase the efficacy of inbound open innovation for gaining superior financial performance. Interestingly, additional analyses suggest an unexpected nonlinear interaction effect with flexibility. When firms possess strong relational capabilities and adopt an open innovation approach, they achieve higher financial performance if they have a low or a high level of flexibility. The theoretical and managerial implications of these findings are discussed.     

Organizing for knowledge generation: internal knowledge networks and the contingent effect of external knowledge sourcing

Research summary : When faced with a new technological paradigm, incumbent firms can opt for internal development and/or external sourcing to obtain the necessary new knowledge. We explain how the effectiveness of external knowledge sourcing depends on the properties of internal knowledge production. We apply a social network lens to delineate interpersonal, intra‐firm knowledge networks and capture the emergence of two important firm‐level properties: the incumbent's internal potential for knowledge recombination and the level of knowledge coordination costs. We rely on firm‐level internal knowledge networks to dynamically track the emergence of these properties across 106 global pharmaceutical companies over a 25‐year time period. We find that a firm's success in developing knowledge in a new technological paradigm using external knowledge sourcing is contingent on these internal knowledge properties . Managerial summary : Incumbent firms in high‐tech industries often face competence‐destroying technological change. In their effort to adapt and develop new knowledge in a novel paradigm, incumbent firms have several corporate strategy options available to them: internal knowledge development and a wide array of external knowledge sourcing strategies, including alliances and acquisitions. In this study, we make an effort to address a critical question: How effective is external knowledge sourcing under different internal knowledge generation regimes? We find that external sourcing strategies are less effective when firms can already internally generate new knowledge or if they have high internal coordination costs. Therefore, when considering external sourcing, managers must carefully weigh the benefits of it vis‐à‐vis its commensurate costs as the benefits of external sourcing may be overstated . Copyright © 2015 John Wiley & Sons, Ltd.     

Citizen participation in public administration: investigating open government for social innovation

In recent years, public sector organizations have increasingly focused on citizen contribution by adopting instruments known from open innovation. By collaborating with the periphery and leveraging external knowledge, government institutions initiate social innovation and stimulate a positive change for society. This article examines the involvement of citizens in an ideation platform initiated by a local government and investigates the motivations affecting participation intensity. Drawing on self‐determination theory, we analyze what motivates citizens to participate in an open government platform and how these motivations influence participation quantity. Based on a survey among platform users and the analysis of usage data from the platform operator, we find that motivations of citizen participation in public administration greatly vary across forms of participation. Whereas, intrinsic motivation is positively associated with producing and consuming platform content, external and introjected regulation negatively relate to individuals’ active contribution. At the same time, external regulation is positively associated with evaluation behavior.     

Technological innovation of firms in China: Past, present, and future

What do we know about technological innovation of firms in China? What are the directions for future research on this topic? This paper summarizes and discusses some of the newest literature on technological innovation of firms in China in the following three ways: (1) the influence of firms?? external factors, (2) the influence of firms?? internal factors, and (3) interfirm cooperation factors. Based on the analysis of these articles, we propose a framework which highlights these influencing factors, decision-making and implementation of technological innovation and innovation performance, in the context of China??s emerging economy. This framework sheds lights on future innovation research.     

Technology policy for the knowledge economy: Public support to young ICT service firms

Public intervention in high-tech sectors is often advocated to resolve market imperfections that may possibly limit the viability of young high-tech enterprises. Although some European countries have adopted national government support policies that explicitly target this type of firm, in Italy and in other EU countries, there are no national support measures specifically designed for them. The paper focuses on the information and communication technologies (ICT) services sector in Italy. It aims to investigate whether both horizontal general-purpose direct support mechanisms at the national level and financial support measures provided by local administrative entities (which rarely have been specific to the ICT sector) permit an efficient allocation of public funds.     

User innovation and everyday practices: micro-innovation in sports industry development

This paper focuses on an underemphasized issue in research on user innovation, namely users' adaptations and micro-innovations and their impact on industry development in user-innovation-intensive industries. It complements previous analyses of rodeo and freestyle-kayaking that explore the role of user innovators in industry development, by focusing on different aspects of micro-innovation: (1) changes in the composition of user base and preferred equipment (2) evolution of everyday practice (3) changes in the settings of these practices and (4) the range of modes of user involvement. Through micro-innovation, users, on the whole, are likely to have more impact on industry development than predicted, and yet the position of lead-users and user–manufacturers may be less powerful relative to outside manufacturers.     

Building dynamic capabilities for innovation: an exploratory study of key management practices

While both the innovation literature and the dynamic capabilities perspective identify loose processes as most appropriate for high uncertainty domains, this produces little reassurance to organizations seeking to improve their ability to commercialize innovations. This paper takes the position that practices for managing innovation project leaders are a key component of an organization's dynamic capabilities for innovation. Our comparative case analysis of divisions of two established Korean organizations suggests that managerial practices include the deployment of entrepreneurial resources having particular skills, characteristics, and motivation. In addition, we identify the relational and decision support roles of managers.