The “Open Innovation” paradigm: A contingency perspective

Abstract

The "open innovation" model is currently being touted as a superior path for achieving long-term success. Rather than relying on their own, limited resources for research and development in the traditional, closed invention system, firms are encouraged to share knowledge across firm boundaries to enhance their innovative potential. Yet, such sharing may also have adverse consequences by reducing the rarity of a firm's inventions. This paper accordingly attempts to identify and analyze the parameters that determine whether open or closed types of innovation management are most appropriate for a given firm. Following a contingency perspective, we examine these determinants as various internal and external constraints (situational factors). More specifically, applying concepts related to absorptive capacity, complementary resources, game theory and others, we derive testable propositions and provide case study evidence regarding the value generating properties of open innovation.

Living Labs as open innovation systems for knowledge exchange: solutions for sustainable innovation development

“…Instead, they plead for so-called 'contextual innovation', or the fact that innovation management should be tailored towards the organisational and societal context of the innovating company. This is confirmed by Torkkeli et al (2009) who found that the incentives to engage in open innovation are different for large versus small companies, while Mention (2011) discovered that a higher degree of innovation novelty shows a positive relation on the degree of cooperation and usage of external knowledge sources.…”

“…In the proposed conceptual model of a Living Lab, infrastructure has a central role since it facilitates collaboration among all actors and enables knowledge and technology spill-overs within the innovation ecosystem. Besides these role-specific hypotheses, we also expect that actors engage in Living Labs because a too broad search for the relevant exploration or exploitation knowledge is inefficient, which draws them to collaborate with a smaller set of actors (Torkkeli et al, 2009). As the absorptive capacity of an actor is related to the degree of previous experience and trust with the other partners, we expect this to have an influence on the Living Lab operations (Bogers, 2011).…”

“…This openness is attained by enabling both inbound and outbound knowledge transfers: internally acquiring external knowledge ('buying') and externally exploiting internal knowledge assets ('selling'), a phenomenon that is referred to as two sides of openness (Torkkeli et al, 2009) or the 'coupled process' of open innovation (Enkel et al, 2009). Besides (immaterial) knowledge, materialised knowledge in the form of technologies can also be the subject of inbound or outbound movements, processes that are referred to as 'technology acquisition' and 'technology exploitation' (Lichtenthaler, 2011).…”

When Is Open Innovation Beneficial? The Role of Strategic Orientation

“…Lichtenthaler () identifies the costs and risks of the open innovation, and Torkkeli et al. () show that open innovation can reduce the rarity of firm knowledge assets.…”

“…Other studies have focused on the relationship between a certain aspect of open innovation and performance, such as collaboration with third parties (e.g., Chesbrough and Prencipe, ), external technology commercialization (Lichtenthaler, Ernst, and Hoegl, ), and cocreation with customers (Fang, Palmatier, and Evans, ). Not all empirical research has found a positive relationship, some studies have indicated possible negative open innovation effects in terms of searching cost for external sources of knowledge (e.g., Laursen and Salter, ; Rothaermel and Deeds, ), the share of personnel costs in the added value (Faems et al., ), the power to control knowledge assets (Torkkeli, Kock, and Salmi, ), and attitudes toward open innovation (Lichtenthaler et al., ). Therefore, our understanding of the open innovation–performance relationship is still fragmented and limited.…”