Open Innovation, Knowledge Flows and Intellectual Capital

The concept of open innovation, of which open source software is a well-cited example, has grown in popularity over the past decade. Firms engaged in open innovation leverage external knowledge to accelerate innovation and exploit innovation more effectively. One way in which firms can connect with external sources of knowledge is by participating in value networks with a multitude of external stakeholders. Nevertheless, there are few studies of open innovation value networks, with relatively little known about the characteristics that impact such networks. We seek to address this gap by exploring the networking arrangements of eight European firms that have a formal strategy around open source software (OSS). The findings reveal that firms selectively engage in two types of value networks in order to benefit from open collaboration and innovation – one a high-density network comprising a limited number of familiar partners, the other a low-density network comprising a larger number of often unknown partners. Additionally, these networks are influenced by certain characteristics such as the level of commitment, knowledge exchange, the alignment of objectives and governance.

PurposeThis study aims to investigate the direct effect of intellectual capital on the organizational performance of Indonesian state-owned enterprises (SOEs) and their subsidiaries. Furthermore, it also examines whether the relationship is mediated by open innovation and moderated by organizational inertia.Design/methodology/approachThis study is designed as quantitative research. A survey method is employed to collect data by distributing questionnaires to the upper-level managers of the SOEs and their subsidiaries. A total of 293 questionnaires were distributed to the respondents, and 97 responses were obtained for further analysis. The partial least square structural equation modeling (PLS-SEM) is used to test the hypotheses. A mediation-moderation research framework is employed.FindingsThe results show that intellectual capital has a positive effect on organizational performance. Further results also demonstrate that open innovation mediates the intellectual capital–organizational performance relationship and organizational inertia moderates the intellectual capital–organizational performance relationship. Theoretically, the findings contribute to the resource-based view (RBV) and knowledge-based view (KBV) by providing empirical evidence of the importance of distinctive internal resources in achieving superior organizational performance. Practically, the findings provide strategic information for managers that they should properly manage intellectual capital, open innovation and organizational inertia because of their effects on organizational performance.Originality/valueFirst, this study addresses the previous research gaps by confirming that intellectual capital has a positive effect on organizational performance in the research setting of an emerging market. Second, by using a mediation research framework, this study shows that open innovation mediates the relationship between intellectual capital and organizational performance. Third, by using a moderating research framework, this study also reveals that organizational inertia weakens the relationship between intellectual capital and organizational performance. Those associations are rarely researched.

While the concept of open innovation has drawn the attention of scholars and practitioners alike, it still remains difficult to capture it particularly in a quantitative, longitudinal setting where data about open innovation activities is largely absent. This impedes an adequate assessment of open innovations’ long-term implications for firms’ innovation and financial performance. While researchers have extensively examined the former link, the latter is controversially discussed against the backdrop of the costs and benefits of open innovation but remains largely unexplored. In this study, we develop and validate a longitudinal, text-based measure for firms’ open innovation activities, and probe related performance implications in a longitudinal, cross-industry setting. Combining machine-learning content analysis to create an open innovation dictionary, we analyze the 10-K annual reports of 8,491 publicly listed firms in the U.S. between 1994 and 2016. Our results support our theorizing that curvilinear relationships that take an inverted U-shape exist both between open innovation and innovation performance, and open innovation and financial performance.

The 18th Open & User Innovation Conference (OUI 2021): Book of Abstracts

Exploring the Scope of Open Innovation: A Bibliometric Review of a Decade of Research

The concept of open innovation has attracted considerable attention since Henry Chesbrough first coined it to capture the increasing reliance of firms on external sources of innovation. Although open innovation has flourished as a topic within innovation management research, it has also triggered debates about the coherence of the research endeavors pursued under this umbrella, including its theoretical foundations. In this paper, we aim to contribute to these debates through a bibliometric review of the first decade of open innovation research. We combine two techniques--bibliographic coupling and co-citation analysis--to (1) visualize the network of publications that explicitly use the label `open innovation' and (2) to arrive at distinct clusters of thematically related publications. Our findings illustrate that open innovation research builds principally on four related streams of prior research, whilst the bibliographic network of open innovation research reveals that seven thematic clusters have been pursued persistently. While such persistence is undoubtedly useful to arrive at in-depth and robust insights, the observed patterns also signal the absence of new, emerging, themes. As such, `open innovation' might benefit from applying its own ideas: sourcing concepts and models from a broader range of theoretical perspectives as well as pursuing a broader range of topics might introduce dynamics resulting in more impact and proliferation.

This study examined the creation of knowledge in two embedded cases of Open Innovation (OI) in a complex technological setting. The study focused on the role of boundaries in knowledge flow and knowledge creation and sought to understand how boundaries shape the trajectory of an OI project. While the OI literature is well-developed, most studies are at the level of the organisation and have examined instances of innovation, rather than longitudinal OI processes. In addition, most have taken a cognitive view of knowledge in theorising OI, which can result in an overly simplified understanding of how agents from different knowledge domains achieve sufficient mutual understanding to create new knowledge. For this reason, I took the novel approach of using a practice-based view of knowledge as the theoretical lens through which to explore knowledge creation, to generate a richer theorisation of knowledge creation in OI projects.In line with this practice-based perspective, the study took a qualitative research approach and used ethnographic methods to collect data over seventeen months, thereby enabling novel insights not available from elsewhere in the literature. The first case examined involved the development of a new diagnostic practice for detecting pre-cancerous changes in human cells in-vivo, using magnetic resonance spectroscopy (MRS) and was at a mature stage of technological development. The second case involved applying the MRS technology developed in the first case, to create a novel diagnostic practice for detecting a mental health condition and was at an early phase of development.The study identified three types of practices involved in knowledge creation: project-specific practices, occupation-specific practices and framework practices. Distinguishing between the practices involved in overcoming knowledge boundaries enabled a detailed theorisation of the processes involved. Differences between agents’ occupation-specific practices (knowledge boundaries), rather than organisational boundaries, impacted the OI projects and caused interruptions that stopped project progress. Each of the three practice types played a specific role in enabling knowledge creation by the agents, who co-developed project-specific practices to overcome their knowledge boundaries. Agents embedded the new project-specific knowledge created, in each case study, into the new or modified project-specific practices.To explicate these findings, I argue that the interruptions to progress in the OI projects due to knowledge boundaries, caused the agents to shift from a state of absorbed coping to one of theoretical detachment. In that state, the agents had the opportunity to self-distanciate, a known precursor activity for knowledge creation, and from that state, to co-create new project-specific knowledge. This process was repeated each time an interruption was encountered, resulting in the accumulation of new knowledge over time as the knowledge creation process unfolded. As successive knowledge boundaries were overcome, agents embedded the increments of project-specific knowledge created into project-specific practices and project-specific objects, with the result that these practices and objects co-evolved over time. Thus, repeated interruptions over time created knowledge cumulatively. I theorised this phenomenon, which has not previously been reported, as practice maturation. I articulated this relationship between interruptions and the cumulative creation of new project-specific knowledge in a proposed processual model of knowledge creation. The finding that repeated interruptions over time created knowledge cumulatively and this relationship between interruptions and cumulative knowledge creation findings, enabled conceptualising an OI project as a continuous, iterative process of individual agents overcoming their mutual knowledge boundaries through a process of self-distanciation, induced by the interruptions they encountered, to create new shared practices and objects. I therefore argue that an OI project is a situated and ongoing process of project-specific knowledge creation and that it is practice maturation that enables an OI project to progress.The study’s main contributions to the Knowing-in-practice literature include the identification of three types of practice enacted to create new project-specific knowledge; the novel concept of practice maturation; the identification of interruptions caused by knowledge boundaries as an alternative means of bringing about self-distanciation, and the repeated encountering and overcoming of knowledge boundaries to cumulatively create knowledge over time, as articulated in the processual model of knowledge creation presented. The study contributes to the OI literature by demonstrating that OI project processes are considerably more complex than how they are portrayed in the dominant OI literature, and by drawing attention to the significant role of knowledge boundaries in knowledge creation involving agents from different knowledge domains. Further, the study highlights the constructive role of interruptions that are otherwise often perceived as evidence that something is ‘wrong’ with an OI project. Finally, the study provides an alternative conceptualisation of OI to the accepted understanding, by identifying the different types of practices involved in it and the role of each in co-creation.

PurposeThe authors aim to investigate the concept of open innovation, identify different open innovation practices which help describe the continuum between closed and open innovation, and propose a framework that suggests an association between innovation contexts and practices.Design/methodology/approachThe authors first identify the variables to describe innovation contexts and practices. Such variables are developed based on the literature and on a previous paper by the same authors in 2011. Then, they establish an association between contexts and practices, and test it through cases drawn from the existing literature.FindingsThe paper proposes a detailed assessment of open innovation practices and suggests the association between each of them and diverse innovation contexts. A few case examples drawn from the literature prove coherent with the theoretical framework underlying the proposed association.Practical implicationsThe authors' results (and specifically the framework) enhance the organizations' awareness of the open innovation concept and the possible practices to implement it, as well as supporting managers to better select open innovation practices in different contexts.Originality/valueThis paper discusses the concept of open innovation practices to enhance the comprehension of the open innovation concept. Also, to the authors' knowledge, the proposed association between context and practices is original in that there are no similar theoretical frameworks that help organizations selecting innovation practices.

The concept of open innovation has successfully diffused among academicians and policy makers, framing innovation work in the post-bureaucratic era. Much of its initial theorising is built on single case studies of early adopters, but there is still a lack of quantitative studies in specific industries and geographical contingencies. In this paper, we report the results of a survey on open innovation (N = 114 firms), targeting the Swedish bio-pharmaceutical industry. The purpose is to shed light on how widespread the knowledge and practical utilisation of open innovation activities actually are in a particular industry. We find that very few respondents were aware of the open innovation concept, and also that open innovation related activities are, to a large extent, integrated within the ordinary innovation practices. At the same time, the application of open innovation activities relates to whether the firm has an innovation strategy, an own R&D department and has successfully launched innovations.

Although sustainability is a key concern in today’s world, more efforts towards achieving sustainability are needed. User inclusion in the information system design process could enhance the outcome of a system’s action towards sustainability. It is, however, important to understand the design procedure of a system to achieve such goals. A framework denominating as the inclusive innovation framework presented in this paper incorporated analyses from open innovation, universal design, and sustainability to motivate the initiation of internal and external driving factors towards sustainability goals. The derived framework could promote the information system’s enabled sustainable goals by combining the use of universal design principles and the concept of open innovation. A requirement engineering model was also proposed that was interoperable within the three subjects of interest discussed in the paper and was necessary for understanding the application of an inclusive innovation framework. Two use cases were then presented as an illustration for arguing the validation of the proposed inclusive innovation framework. The findings from the use cases indicated that the use of universal design principles along with an open innovation concept could increase information systems’ enabled sustainability goals. This could be done by enhancing a system’s successfulness along with the increased user satisfaction.

Companies have historically invested in large research and development departments to drive innovation and provide sustainable growth. This model, however, is eroding due to a number of factors. What is emerging is a more open model, where companies recognize that not all good ideas will come from inside the organization and not all good ideas created within the organization can be successfully marketed internally. To date, Open Innovation concepts have been regarded as relevant primarily to ‘high-technology’ industries, with examples that include Lucent, 3Com, IBM, Intel and Millenium Pharmaceuticals. In this article, we identify organizations in industries outside ‘high technology’ that are early adopters of the concept. Our findings demonstrate that many Open Innovation concepts are already in use in a wide range of industries. We document practices that appear to assist organizations adopting these concepts, and discover that Open Innovation is not ipso facto a recipe for outsourcing R&D. We conclude that Open Innovation has utility as a paradigm for industrial innovation beyond high tech to more traditional and mature industries.

Making intellectual capital the strategic resource of an innovation-oriented organization under post-industrial economy formation requires improving the decision-making quality while choosing its development strategies. To a large extent, the effectiveness of strategic intellectual capital management depends on its methodological principles development, which determines the relevance of the subject chosen.The purpose of the article is to form a methodical tool for substantiating the strategies of intellectual capital development in a research organization based on multi-criteria analysis.As a methodological platform, the following methods for conducting research were chosen: an aggregated structural approach, in particular, the method of audit-evaluation by Brooking, to evaluate intellectual capital; SWOT analysis – to determine the strategic position of the company regarding its intellectual capital. To confirm the expert opinions consistency within the empirical studies framework, the concordance coefficient, estimated on the Pearson criterion, was calculated. The key to research is the multi-criteria analysis (SAW, TOPSIS, COPRAS) methods for evaluating, ranking and selecting strategic alternatives for the intellectual capital development of the research company.Thus, the article takes a new view of using the scenario approach to the formation of an intellectual capital strategy. The strategy development stages are outlined, and the peculiarities of their methodological support are determined. In particular, the necessity to include into the test program for intellectual capital the estimation of its management efficiency is proved. The authors present an example of adapting SAW, TOPSIS, COPRAS methods for the evaluation and ranking of strategic alternatives to human, structural and market capital development.Consequently, the results allowed to mathematically formalize the rating task and to form the optimal strategies portfolio of human, structural, market capital of organization, as well as to combine factors of the internal and external environment. Thus, the suggested methodological approach can be used by the heads of research organizations to develop and substantiate strategic management decisions to optimize their intellectual capital development.

Open Innovation remains the process of enabling inflow and outflow of knowledge, ideas, design, plus technologies throughout the organization during the various stages of the innovation process. This Innovation consists of inbound and outbound open innovations, whereby inbound open Innovation is the influx of knowledge, while outbound open innovation remains the outward flow of knowledge. Previously, studies related to open innovation have only focused specifically on the business world, the industrial sector while less focused on strategy and its implementation in the education sector. This study aims to fill this gap by studying open innovation in ordinary day secondary schools due to their significant contribution to development Malaysian education. Based on an open innovation model and a theory of views based on resources, this study will analyse the role of open and innovative innovation activities government support in determining the innovative capabilities of secondary schools. In this conceptual paper, the author develops the conceptual model that will be used in further research activities in education sector and will contribute to a better understanding of open innovation activities and their practices in secondary schools in Malaysia.

Open innovation (OI) is one of attractive concepts in innovation management literature. Many firms have been investing their resources and efforts into activities and development programs along with the OI concept to improve their innovation performance. The fundamental of OI concept relies on making the best usage of innovation through either integrating external complementary resources with internal ones or commercialising unused internal technologies to the market or both. Hence, the value creation and value capture in OI involve partnering firms with the perfect blend of complement traits and compatible ones. Given multiple choices of alliances in a technology market, managers are however vulnerable to a risk of selecting inappropriate partners especially external ones. The consequences possibly lead to unsmooth coordinations and failures in the OI activities and projects. Drawing on OI literature, this article presents the understanding of complementarity and compatibility dimensions and discusses the roles of managers in determining the appropriateness of external partners.

In the last installment of this column, I initiated a new series of topics aimed at defining the vocabulary of innovation management. The object is to look critically at the profession's terms of art, exploring their origins and mapping their limitations, to provide new clarity, and in the process restore some of their power. By looking at the terminology at the heart of innovation management and exploring how it has emerged and evolved, perhaps we can also get a glimpse of where innovation is heading. In the first entry in the series, we looked at the concept of disruptive innovation. This time, we're examining another concept whose usage has become confused and, at times, diluted: open innovation. Henry Chesbrough introduced the concept of open innovation in his 2003 book, Innovation: The New Imperative for Creating and Profiting from Technology. Despite popular conceptions, Chesbrough didn't actually invent open innovation--his book is rich with examples of companies already doing it. Rather, he gave a name to the pattern and defined the paradigm: Innovation is a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology. Innovation combines internal and external ideas into architectures and systems whose requirements are defined by a business model. He refined that definition in a 2006 book he co-edited, Innovation: Researching a New Paradigm: Open innovation is the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respectively. The key in both definitions is the focus on an approach driven by the business model. As Gene Slowinski and Matt Sagal point out, in their 2003 book and in a 2010 RTM article, that approach must be supported by a set of tools and processes designed to facilitate the relationships--with universities, with researchers, with individual inventors, even with competitors--that are at the core of open innovation. Slowinski and Sagal's Want-Find-Get-Manage model, described in detail by Slowinski in Reinventing Corporate Growth, offers one framework for sustaining collaborative innovation. Chesbrough's assertion--in the books and in a series of journal articles between the two books (including two in the pages of this journal)--that open innovation would become absolutely essential was not wildly speculative; the precursors were clearly in place in the early 2000s. But he could not have predicted the changes to come in the few years after that first work, or the ways in which they would make openness both easier and more vital. Indeed, Innovation arrived on the cusp of revolutionary change. As markets became ever more dynamic and unpredictable, new technology platforms allowed knowledge to circulate ever more freely and far more widely. Facebook, Twitter, LinkedIn, and Kickstarter all were born after open innovation. Wikipedia, Linux, Google's Raspberry Pi, and other open-source projects revealed the power of mass collaboration to create knowledge through unfettered sharing. And Red Hat and others showed that there was money to be made from open-source platforms. The crowd and the cloud became viable, even essential, tools. Wired magazine introduced the term crowdsourcing to the world in a 2006 article by Jeff Howe, and suddenly innovation had an entire new toolset. All companies had to do was figure out what to do with it. As Kevin Boudreaux and Karim Lakhani warned in a 2013 HBR article on the subject, Crowds are moving into the mainstream; even if you don't take advantage of them, your competitors surely will. All of these developments offered new tools for pursuing open innovation. But what many practitioners and researchers alike have done is conflate these new tools with open innovation itself, either treating crowdsourcing and open innovation as synonyms or suggesting some other kind of equivalence between the two concepts. …