Research Unit on Open Innovation Search

Abstract:

An increasing number of firms have moved away from relying on internal R&D as the central mechanism in the search for innovations, shifting towards more open and distributed models of innovation. Such activities call forth a new range of related practices to engage external parties in firm-level innovation efforts, making firms’ search processes more externally and collaboratively oriented. Indeed, there is considerable evidence that firms in their innovative activities tend to use a number of different internal and external sources of innovation such as suppliers, universities, customers and other users as inputs to their product and process innovations. However, while theory and practice suggest clear benefits from having access to a variety of knowledge inputs, using such inputs may also be costly. Bringing in external knowledge typically requires both large asset specific investments in personal and organizational networks and exposes the firm’s knowledge to unplanned disclosures. Indeed, in general, the Open Innovation literature is not very forthcoming when it comes to identifying the costs of being open. The central contribution of this application is to examine gains as well as costs and to identify important trade-offs that emerge when firms embark on an open innovation strategy. We aim to develop an understanding of how costs and benefits relate to firm-external search strategies and how such strategies, in turn, influence organizational performance. Consequently, our scientific research question is: How do the tradeoffs involved in open search for technological innovation work; and how do these tradeoffs affect organizational performance?