Leveraging External Sources of Innovation: A Review of Research on Open Innovation

Abstract

This paper reviews research on open innovation that considers how and why firms commercialize external sources of innovations. It examines both the “outside‐in” and “coupled” modes of open innovation. From an analysis of prior research on how firms leverage external sources of innovation, it suggests a four‐phase model in which a linear process—(1) obtaining, (2) integrating, and (3) commercializing external innovations—is combined with (4) interaction between the firm and its collaborators. This model is used to classify papers taken from the top 25 innovation journals, complemented by highly cited work beyond those journals. A review of 291 open innovation‐related publications from these sources shows that the majority of these articles indeed address elements of this inbound open innovation process model. Specifically, it finds that researchers have front‐loaded their examination of the leveraging process, with an emphasis on obtaining innovations from external sources. However, there is a relative dearth of research related to integrating and commercializing these innovations. Research on obtaining innovations includes searching, enabling, filtering, and acquiring—each category with its own specific set of mechanisms and conditions. Integrating innovations has been mostly studied from an absorptive capacity perspective, with less attention given to the impact of competencies and culture (including “not invented here”). Commercializing innovations puts the most emphasis on how external innovations create value rather than how firms capture value from those innovations. Finally, the interaction phase considers both feedback for the linear process and reciprocal innovation processes such as cocreation, network collaboration, and community innovation. This review and synthesis suggests several gaps in prior research. One is a tendency to ignore the importance of business models, despite their central role in distinguishing open innovation from earlier research on interorganizational collaboration in innovation. Another gap is a tendency in open innovation to use “innovation” in a way inconsistent with earlier definitions in innovation management. The paper concludes with recommendations for future research that include examining the end‐to‐end innovation commercialization process, and studying the moderators and limits of leveraging external sources of innovation.

The relation between coopetition and innovation/entrepreneurship

“…The relation between coopetition and… Accordingly, some studies have begun to link coopetition to innovation (Ritala 2012;Bouncken and Fredrich 2012;Ritala and Sainio 2014;West and Bogers 2014;Yami and Nemeh 2014;Bouncken et al 2016). As innovation becomes further rooted in the organization's capacity to access external knowledge sources, coopetition increasingly shares a positive relationship with innovation, which offers a mechanism for organizational learning (Bengtsson and Kock 2000;Mas-Tur and Soriano 2014).…”

Complex regional innovation networks and HEI engagement - the case of Chicago

“…Carrillo (2015) has proposed that the shift from closed to open innovation as the major cultural evolution underlying the transition from industrial to knowledge societies. West and Bogers (2014) consider that there is a tendency to ignore the importance of business models in open innovation models, which were previously perceived to be at the core of research on interorganisational collaboration in innovation, and they also argue that universities were seen earlier as a special source of external innovations. Further Kodama and Shibata (2015) argue that 'the creation of a new business model' moving beyond 'demand articulation' is crucial to the 'second innovation cycle' and in particular the process of innovation.…”

Assumptions of Customer Knowledge Enablement in the Open Innovation Process

“…In this case, the ideas of West & Bogers (2014) fit there the best as they proposed an integrated four-step model for outside-in open innovation ( Fig. 1), because basic logic of this model is directed to the use of external knowledge sources.…”