There is a wealth of research on technological learning in developing countries, but few scholars have clearly addressed the issue of learning time in an empirical way. This paper aims to fill this void by presenting an empirical investigation of the time needed by Chinese firms to learn from the technologies that they have in-licensed. Furthermore, we analyzed in detail the antecedents leading to an acceleration or deceleration of the learning process among Chinese licensees. The results of an event history analysis indicate that recipient firms take on average 5.8 years to learn from their in-licensed technologies. The absorptive capacity and firm age of the licensees, the technology licensing scale, the age of the licensed technology, and the desorptive capability of the licensor firm all play a role in shortening the learning time.
Open innovation strategies in large firms have been changing considerably during the last 15 years. Some multinationals are now taking a long-term, strategic approach to Open innovation, thereby actively developing a regionally bounded innovation ecosystem. This approach goes beyond the tradition of open innovation, which emphasized the opening of firms’ boundaries for inbound and outbound knowledge flows. In the new approach, multinationals actively shape their innovation environment to better exploit external talent and expertise, share public infrastructure, raise funds and influence public policies - the key enablers for establishing a vibrant, world-class research and development (R&D) environment. We examine one such regionally embedded innovation ecosystem set up by Janssen Pharmaceuticals at its global R&D centre in Beerse, Belgium.
We develop a conceptual framework by integrating Open innovation, Innovation Ecosystems and Regional Economics literature streams. This combination of the three distinct theoretical approaches is required to explain the benefits and working of Janssen Pharmaceuticals’ regionally embedded innovation ecosystem.
•Some multinationals are taking strategic approach to Open Innovation (OI) by shaping the regional innovation ecosystem.•Regional innovation ecosystem strategy brings together key enablers for developing R&D environment conductive to innovation.•Benefits and working of regionally-embedded innovation ecosystem at Janssen Pharmaceuticals are explained in this study.•Open Innovation theory alone is not enough to understand the structure and functioning of such OI ecosystems.•We propose a framework based on contributions from Open Innovation, Innovation Ecosystems and Regional Economics.
An increasing number of companies are practicing open innovation by relying on external sources of technology. However, inbound open innovation is not always leading to the expected improvements in innovation performance. A key factor for success is quickly and reliably determining which technology or solution a company should source externally. In this study, we explore reliable ways of finding relevant technology using intellectual property databases.
Search for external knowledge is vital for firms’ innovative activities. To understand search, we propose two knowledge search dimensions: search space (local or distant) and search heuristics (experiential or cognitive). Combining these two dimensions, we distinguish four search paths – situated paths, analogical paths, sophisticated paths, and scientific paths – which respond to recent calls to move beyond “where to search” and to investigate the connection with “how to search.” Also, we highlight how the mechanisms of problem framing and boundary spanning operate within each search path to identify solutions to technology problems. We report on a study of 18 open innovation projects that used an innovation intermediary, and outline the characteristics of each search path. Exploration of these search paths enriches previous studies of search in open innovation by providing a comprehensive, but structured, framework that explains search, its underlying mechanisms, and potential outcomes.
This paper investigates to what extent internal R&D efforts and different types of external knowledge sources jointly affect innovation performance of firms in emerging economies. Based on a survey about external knowledge sourcing activities of Chinese innovative firms, we categorize external knowledge sources into four groups: science‐based partners; horizontal connections; value chain partners, and technology service providers. We find that both internal R&D activities and external knowledge sourcing have a positive effect on firms' innovation performance. Strong internal R&D capabilities also increase the effect of sourcing from value chain partners and horizontal connections, but we do not find support for complementarity between internal R&D and collaborations with universities and research labs. These findings jointly suggest that the mixture of different types of external knowledge partners in combination with internal R&D capabilities is crucial in understanding the role of open innovation in emerging economies.
We review the contribution and evolution of open innovation since the publication of Chesbrough's 2003 Open Innovation book, and suggest likely directions going forward. We link the articles of this special issue to three key trends in open innovation research: better measurement, resolving the role of appropriability and linking that research to the management and economics literature. From this, we identify other trends and suggest opportunities for future research.
This paper examines the relationship between (outside-in) open innovation and the financial performance of R&D projects, drawing on a unique dataset that contains information on the open innovation practices, management and performance of 489 R&D projects of a large European multinational firm. We introduce two types of open innovation partnerships – science-based and market-based partnerships – and examine their relationships with project financial performance. In addition, we investigate whether the open innovation—project performance relationships are influenced by the way how R&D projects are managed. Our results show that R&D projects with open innovation partnerships are associated with a better financial performance providing that they are managed in the most suitable way. Market-based partnerships are positively correlated with project performance if a formal project management process is used; however these partnerships are associated with a lower performance for loosely managed projects. In contrast, science-based partnerships are associated with higher project revenues for loosely managed projects only.
This paper explores the strategic dimensions of R&D decisions toward novelty and openness in explaining the performance of latecomer firms in a developing economy. A structural equation model of R&D decision-making is formulated using survey data from 279 Chinese firms. The dimension of R&D novelty is defined as the degree of technological newness found in firms' R&D projects, while R&D openness describes the degree to which technologies are acquired from external sources. Our results indicate that firms' R&D decisions regarding novelty and openness are associated with demand opportunities, market competition, technological capability, and external networks. Greater R&D novelty contributes positively to innovative output but does not affect sales growth. Greater R&D openness contributes positively to sales growth but negatively to innovative output.
Some developing countries are emerging as nexuses in the globalisation of innovation activities, serving as the location for crucial R&D activities from developed multinational firms (DMFs), which are headquartered in developed countries, and spawning emerging multinational firms (EMFs), which are headquartered in developing countries and conduct some of their R&D in developed countries. This paper proposes a framework and a methodology to identify international patterns of innovation at the firm-level as well as at the national level. According to a reconstruction of the R&D owner-inventor structure, we develop the analytical framework as a 3 × 3 matrix and identify three different patterns for both EMFs and DMFs in the organisation of their R&D internationalisation activities. We derive from this matrix three patterns at the national level to describe the ways how a developing country can reach the global innovation stage. We use China as a case to verify this framework.
This paper focuses on the organization of new product development in large, R&D‐intensive firms. In these firms, research and development activities are often separated. Research is conducted in dedicated research projects at specialized research labs. Once research results are achieved by research projects, they are transferred to business units for further development and commercialization. We investigate the speed whereby research projects transfer their first research results to business units (hereafter: transfer speed). In particular, we analyze the antecedents and performance implications of transfer speed. Based on data of 503 research projects from a European R&D intensive manufacturing firm, our results suggest that a fast transfer speed (as measured by the time it takes for a research project to develop and transfer its first research result to business units) is associated with a better research performance (as measured by the total number of transfers the research project generates). Moreover, we find that different types of external R&D partners—science‐based and market‐based partners—play distinct roles in speeding up project first research transfers. While market‐based partnerships (i.e., customers and suppliers) generally contribute to a faster transfer of first research results, science‐based partnerships (i.e., universities and research institutions) only speed up first research transfers of technologically very complex projects. Our results also show that early patent filings by research projects accelerate first research transfers.
While clique-embeddedness is generally considered to enhance firm performance, there are also reasons to expect that under conditions of technological turbulence clique-membership is less beneficial or might even become a liability. To address this, we study the innovative performance of clique members during periods of both technological change and technological stability. We find support for the idea that companies' ability to adapt their alliance network (i.e. forming ties beyond the scope of the clique) and their ability to adapt their technology portfolios (i.e. access to novel technological knowledge) positively influences their innovative performance during technologically turbulent periods.
In this paper, we investigate the cooperative relationships of innovating firms with (dis)similar partners during the technology life cycle. We test the impact of such cooperative relationships on the innovative and market performance of these firms. To do so, we use a sample of 83 Application Specific Integrated Circuit firms over the period 1986-2005. We find that working with partners that are technologically similar improves innovative and market performance early on in the technology life cycle. Working with partners that are technologically dissimilar improves innovative and market performance later on in the technology life cycle. These results indicate that innovating firms have to change their partnership from technologically similar towards technologically dissimilar over the technology life cycle.
Technology development in firms is frequently based on a combination of internal and external technological learning. Consequently, firms need to develop both technological capital (a patent portfolio) and alliance capital (a portfolio of technology alliances). This paper examines the relationship between technological capital, alliance capital, and their joint impact on the technological performance of firms, with an application to the application‐specific integrated circuit industry. We find that positive marginal returns to alliance capital are decreasing at higher levels of alliance capital. Technological capital and alliance capital can either augment or reduce each others' influence on innovation performance depending on the stage of the technology life cycle in the industry. A reinforcing relationship related to absorptive capacity requirements and technological uncertainty is present in early stages, while technology leakage and market competition effects render the combination of high levels of technological and alliance capital counterproductive in later stages of the technology life cycle.
In this paper we explore how small and medium-sized enterprises () engage in external knowledge sourcing, a form of inbound open innovation. We draw upon a sample of 1,411 and empirically conceptualize a typology of strategic types of external knowledge sourcing, namely minimal, supply-chain, technology-oriented, application-oriented, and full-scope sourcing. Each strategy reflects the nature of external interactions and is linked to a distinct mixture of four internal practices for managing innovation. Both full-scope and application-oriented sourcing offer performance benefits and are associated with a stronger focus on managing innovation. However, they differ in their managerial focus on strategic and operational aspects.
Four cases of open innovation in private family SMEs in low- and medium-technology industries are considered in
order to examine the ways in which family firms can both foster their willingness and use their ability to engage in
open innovation activities. Our cases illustrate how family SMEs can successfully engage in open innovation by
handling multiple and conflicting goals within the family firm in particular ways and by taking up orchestration roles
within their own open innovation networks to minimize concern for the loss of control.
This study analyses the reasons of value creation inability of wood furniture manufacturing Micro and Small Enterprises (MSEs) which are in rural areas of Tanzania. The lack of financial capital, lack of appropriate technologies, lack of the market, lack of raw materials, lack of skills and lack of commitments restrains ability of rural MSEs to create value. Legal concerns, suppliers, customers, competitors, middlemen and transport concerns limits the abilities of rural MSEs to create value. Study also shows, the core reasons of value creation inability varies between rural MSEs due varied availability of basic amenities in rural areas. Mvomero district is the study area. This qualitative study has used the multiple-cases research design. Through purposive sampling, the study has used thirty cases. Interviews and observations are data collection methods. The cross-case analysis of cases has been conducted. The holistic analysis of identified reasons of value creation inabilities combined with the characteristics of rural MSEs has been conducted thus provides clear understanding of the 'restraining situations' which limits the ability of rural MSEs to create value.
Purpose Boundary-spanning exploration through establishing alliances is an effective strategy to explore technologies beyond local search in innovating firms. The purpose of this paper is to argue that it is useful to make a distinction in boundary-spanning exploration between what a firm learns from its alliance partners (explorative learning from partners (ELP)) and what it learns from other organisations (explorative learning from non-partners (ELN)). Design/methodology/approach The authors contend that alliances play a role in both types of exploration. More specifically, the authors discern three types of alliances (inside ties, clique-spanning ties and outside ties) based on their role vis-a-vis existing alliance cliques. Clique members are highly embedded, and breaking out of the cliques through clique-spanning and outside alliances is crucial to improving explorative learning. Thereafter, the authors claim that clique-spanning ties and outside ties have a different effect on ELN and ELP. Findings The empirical analysis of the "application specific integrated circuits" industry indicates that inside ties have negligible effects on both types of explorative learning. Clique-spanning ties have a positive effect on ELP, but not on ELN. The reverse is true for outside ties. The results show that research on explorative learning should devote greater attention to the various roles alliance partners and types of alliances play in advancing technological exploration. Originality/value The literature only emphasises the learning from partners, focussing mainly on accessing their technology. In sum, alliance partners play different roles in exploration, and their network position influences the role they are able to play.
Embracing outside-in open innovation (OI) can result in a plethora of organizational advantages, including improved innovation performance. Although some studies have found that outside-in OI improves innovation performance, others have shown that it has no effect or even a negative effect. This mixed empirical evidence leads to a need to unpack the relationship between outside-in OI and innovation performance, and to examine how certain key mediating variables related to the outside-in OI process can ensure that outside-in OI turns into improved innovation performance. Thus, this paper aims to examine the influence of outside-in OI on innovation performance considering the mediating roles of knowledge sharing and innovation strategy. This paper draws on a cross-industrial sample of 112 firms. Data are analyzed using a set of ordinary-least-squares regression models and the bootstrap procedure. Results show that knowledge sharing and innovation strategy fully mediate the relationship between outside-in OI and innovation performance.
Firms need to innovate and develop dynamic capabilities to create a sustainable competitive advantage. Due to this pressure, firms in high-tech industries invest a high percentage of their revenues in innovation. Despite the vast number of innovation success stories, only one in five innovation projects reaches the market. It is important to understand the drivers of project termination as many firms make sizable investments in innovation and these drivers may have a significant impact on their innovation performance. Therefore, the earlier recognition of unfeasible projects would avoid continued investment and release resources that could be invested in more profitable projects. This paper investigates firm-level factors influencing the termination of innovation projects based on a sample of 4385 firms in the Czech Republic and Germany. We find that firm size, research and development activities, organizational agility, and the level of internationalization are positively associated with innovation project termination. Surprisingly, marketing innovation is also positively associated with project termination. Our results contribute to an improved understanding of why some firms are better at identifying unsuccessful projects (earlier) than others. Identifying generalizable factors provides complementary insights into project-level factors of project termination that can have a remarkable impact on the profitability and survival of firms.
We extend the Profit from Innovation (PFI) framework (Teece, 1986) by combining it with open innovation insights: we explore when and how managers make the transition between closed and open innovation, and how they use appropriation (formal and informal defense mechanisms) and project strategies to capture the value generated from the innovation at the project level. Based on a radical innovation project at Jaguar (UK), we contribute to a process and temporal perspective of open innovation by shedding light on two core project processes and their enabling mechanisms which influenced the ability of Jaguar to maximize profits from the innovation. The first core project process was the choice of timing of the shift from a closed to an open model of innovation: it was enabled by a pro-active change in the formal defense strategy (i.e. submission of a patent), and by an internal loose coupling project strategy that involved autonomy of the project champion and internal engineers’ weak membership in the project. The second core process was an external loose coupling project strategy that was enabled by the deployment of two complementary informal appropriation mechanisms namely, the reduction of the scope of tasks allocated to external partners combined with the development of guarded relationships with them.
•We map two types of trajectories from value creation-capture tensions to solutions.•The first trajectory type is resolution paths, where initial tensions are resolved.•The second type is tension loops, where tensions persist, or new tensions emerge.•The tension loops entail compound tensions, pointing to high complexity.•The majority of tension loops remain unresolved.
This study aims to elevate the current understanding of value creation and value capture tensions that emerge in open innovation projects and of their potential solutions. In contrast with prior studies that often suggest specific solutions to individual tensions, our study takes an integrative approach by considering complex (bundles of) tensions and potential solutions to these. The study employs qualitative methods and builds on interview data from six case companies and a group of expert informants. We investigate unfolding events from the point when value creation – value capture tensions are identified in open innovation projects, to the search for their solutions. We label such sequences of unfolding events as trajectories. Our findings reveal two types of trajectories: resolution paths, which are trajectories from initial tensions to solutions, and tension loops, where initial tensions persist and/or new tensions emerge after solutions are enforced. We analyze a total of 17 trajectories, of which seven are marked as resolution paths, and ten represent tension loops. For the majority of the tension loops in our data (eight out of ten) the tensions remain unresolved. We further categorize the types of tensions and discuss the implications of our results for researchers and practitioners.
This study explores how organizations in innovation ecosystems co-create and capture value and what types of challenges they face in creating and capturing value. Based on a multiple case study, the authors show that organizations in nano-electronics establish innovation ecosystems to access not only knowledge and technology, but also other complementary assets. The analysis of various value creation and capturing mechanisms enables the authors to generate a framework to illustrate the potential challenges and required management activities in developing innovation ecosystems. Finally, the authors offer some reflections on the theoretical implications of this study and the lessons for managers and policymakers.
Recent literature on open innovation (OI) highlights the need for studies regarding the factors that influence firms to switch from a closed to an OI strategy. At the same time, stakeholder literature points out the scarcity of knowledge regarding antecedent factors fostering collaboration with the firm's stakeholders and their engagement for higher value creation. To fill these gaps, we propose an analytical framework for implementing a strategic OI process through the development of stakeholder engagement. Our framework comprises 17 factors grouped in five levers: knowledge, collaboration, organizational, strategic, and financial. We empirically applied this framework to two industrial SMEs. A qualitative study was conducted based on semi-structured interviews with internal and external stakeholders of both firms. The results show that one company successfully implemented the OI process, while the other struggled to evolve from a traditionally closed innovation model to a more open model. Analyzing the results, we identified several aspects that could explain this difference. These aspects concern the OI activities performed by both firms, the combination of the five levers into a coherent OI approach, stakeholder engagement, and the characteristics of the CEOs. The current study contributes insights for theory and practice, especially as it proposes an original framework for developing a strategic OI process that integrates a stakeholder approach.
Purpose Innovation ecosystems have not been defined univocally. The authors compare the different approaches to innovation ecosystems in the literature, the link with open innovation, the value creating and value capturing processes in innovation ecosystems, and the need to orchestrate them properly. In this way, the purpose of this paper is to provide a highly needed, concise overview of the state of the art in innovation ecosystem thinking. Design/methodology/approach A systematic screening of the literature searching for publications focusing on innovation ecosystems is carried out in the paper. The authors found 30 publications and compared the different approaches to innovation ecosystems: the authors classify them according to industries, the level of analysis, their central focus on innovation ecosystems, whether frameworks are developed in the publications, the main actors, focus on SMEs or large companies, the success of innovation ecosystems and the role of the orchestrator. Findings The authors found different approaches to innovation ecosystems in the literature. Some papers look at the link with open innovation, and others at the value creating and value capturing processes in innovation ecosystems, the role of orchestrators, etc. The authors also provide an overview about the industries, the level of analysis, the central focus of the research, the main actors in the networks and the success factors. The authors observe that most publications have been written in Europe and apply to European ecosystems. The approach in Europe is, to some extent, also different from the main focus of leading American scholars. Research limitations/implications The authors compare different approaches to innovation ecosystems. This provides a highly needed understanding of the state of the art in innovation ecosystem thinking. There are some limitations as well: the paper only does a literature review, and the authors are not developing a new framework to study innovation ecosystems. Practical implications The literature overview is not primarily focused on practitioners, but the tables in the paper provide a quick overview of good management practices for setting up and managing innovation ecosystems. Social implications Innovations ecosystems are, in some cases, established to solve major societal problems such as changes in healthcare, energy systems, etc. Therefore, they require the interaction between different types of partners including universities, research institutes and governmental agencies. Studying innovation ecosystems is crucial to facilitate social or societal changes. Originality/value The paper presents a highly needed overview of the literature about innovation ecosystems and a concise examination of the different aspects that are studied so far.
In a highly competitive business environment, firms are increasingly opening up to external partners and gathering their knowledge to improve internal innovation processes. Although researchers have found that outside-in open innovation (OI) has a multitude of positive outcomes (e.g., improved innovation performance), few have studied its antecedents, and especially the “softer” ones. Thus, this study aims to empirically examine three “softer” drivers of outside-in OI (i.e., entrepreneurial culture, OI support, and OI enablement), based on a cross-industry sample of 104 firms. The results show that the relationship between entrepreneurial culture and outside-in OI is fully and positively mediated by OI enablement, whereas the mediating role of OI support in such relationship is not significant. This implies that entrepreneurial culture is unlikely to increase the level of outside-in OI, unless firms enable their employees, through systematic training and the deployment of teams, to effectively gather relevant knowledge from external partners.