New Frontiers in Open Innovation

Henry W. Chesbrough, Wim Vanhaverbeke, Joel West (editors)

 

This book - which will be published October 2014 by OUP -  seeks both to integrate a decade of prior research on open innovation and to engage the academic community in fostering new research. It offers a comprehensive overview of what we think will be the most important, most promising and most relevant research topics in the coming decade

 

 

 

 

 

 

 

 

 

 

 

 

Click on the graph for a Powerpoint Presentation about the book. 

 

Below you find the chapter titles and abstracts. Click on the title to get access to the chapter in PDF-format.

01

Explicating Open Innovation: Clarifying an Emerging Paradigm for Understanding Innovation

- Henry Chesbrough and Marcel Bogers

In this chapter, we explore the growth, scope and impact of the academic literature that has arisen since the publication of Open Innovation back in 2003. Moreover, we further clarify and develop the conceptualization of open innovation, which we define as a distributed innovation process based on purposively managed knowledge flows across organizational boundaries, using pecuniary and non-pecuniary mechanisms in line with theorganization's business model. On this basis, we then discuss divergent views on open innovation and we call for greater consistency in future research. Next, we address some of the critiques on the notion and development of open innovation as they have emerged in the literature so far. Finally, we consider the progress open innovation research has made, relative to the research agenda identified in Chesbrough, Vanhaverbeke, and West (2006), and extend the possible research subjects and units of analysis.

02

Firms, Users, and Innovation: An Interactive Model of Coupled Open Innovation

- Frank Piller and Joel West



Open innovation and user innovation share certain key precepts, but differ in key values and assumptions, as well as in the phenomena they study. In this chapter we analyse an important area of overlap: firms incorporating innovations from individuals. We extend previous conceptions of the coupled mode of open innovation to cover such firm-individual interactions, to include interactive co-creation outside the boundaries of the firm. From this, we present a process model for interactive coupled open innovation that comprises four phases: problem definition, finding participants, external collaboration and leveraging the collaboration results.

03

A Classification of Open Innovation and Open Business Models

- Wim Vanhaverbeke and Henry Chesbrough

 

Open innovation and open business models are two concepts that have been launched by Henry Chesbrough (2003a; 2006a; 2007b). Here, we develop a classification scheme through the combination of open–closed innovation and traditional vs. open business models. Furthermore, we consider new product development or new business development as just one specific driver for competitive advantage. Product innovations may not be an option for companies producing commodities but their competitive drivers may be affected by product innovations of their (technology) partners. Reframing open innovation in this way allows us to shed light on innovation networks in which the instigators of the network are for instance customers or complementors (but not the innovators themselves) who are benefitting from innovations of their technology partners. This approach in which we define open innovation and open business models more carefully in combination with a change in focus from new product development to competitive drivers results into a general classification scheme for open innovation research. The simplicity of the structure should make it attractive as a starting point for new developments or application areas in the open innovation literature.

04

Challenges of Funding Open Innovation Platforms: Lessons from Symbian Ltd  

- Joel West 

A key idea of open innovation is that multiple firms must often cooperate to create value for customers. Research inside and outside of open innovation has considered various network forms of cooperation, including alliances, networks, communities, consortia, ecosystems and platforms. In particular, ICT products such as general purpose computers rely on the collaboration of ecosystems and platforms to support their value creation (West, 2006; Gawer, 2009). Here Joel West examines these issues in the context of Symbian Ltd., a U.K. software company that during its 10-year existence created the world‘s most successful smartphone platform. Funded by leading handset makers, it gained instant legitimacy and leveraged their resources and access to customers — but was hobbled by their conflicting roles as Symbian‘s owners and primary customers. In the face of competition from the iPhone and Android, it was acquired by Nokia in 2008 and then later abandoned. From this, the author suggests broader insights into open innovation platform competition, the challenges of startups managing a complex ecosystem and the importance of funding new platform development by platform chaining from an existing revenue stream.

05

Open Innovation and Industrial Dynamics: Towards a Framework of Business Convergence 

Jens Frøslev Christensen

This chapter presents a framework for understanding business dynamics that are not confined to industry-specific trajectories but instead reflect convergence and divergence of industries and product markets. The framework serves four purposes. First, it offers a systematic way of analyzing business and innovation contexts that are not well explicated by the industry-confined frameworks associated with the Five Forces, the Product Life Cycle and the Innovation Life Cycle models. Secondly, it proposes a theory of the generative mechanisms underlying convergence and divergence. Thirdly, it provides a new “life cycle” model, the Convergence Life Cycle. And fourthly, the framework is argued to contribute to a better understanding of the contextual dynamics underlying the Open Innovation paradigm and the related Dynamic Capabilities perspective in strategic management.

06

Exploring Open Innovation at the Level of R&D Projects 

Wim VanhaverbekeJingshu DuBart Leten and Ferrie Aalders

Most studies on open innovation have been conducted at the firm level, linking R&D collaboration to firms’ innovative performance by using aggregated indicators. Given the increasing popularity of R&D collaboration in research projects, it is surprising that, so far, few studies have researched the relationship between open innovation and performance of R&D projects at the project level. As open innovation research at the individual R&D project level is new, we explore the research opportunities related to this new level of analysis: more specifically we identify more accurate ways to couple open innovation to innovation performance, innovation speed and timing of openness in R&D projects. Finally, we formulate several suggestions at the end of the chapter how open innovation researchers can further develop this topic.

07

Exploring Open Innovation in Small and Medium-Sized Enterprises 

- Sabine Brunswicker and Vareska van de Vrande

Over the past years, research in open innovation has flourished. However, small and medium- sized enterprises (SMEs) have been excluded from the mainstream discussion in open innovation research. Only recently have researchers started to investigate the relevance and the specific nature of open innovation in SMEs. These studies confirm that open innovation matters. They also provides a clear indication of the specific nature of how SMEs can benefit from openness suggesting that existing findings on open innovation in large firms cannot be directly transferred towards the SME sector. Overall, open innovation research in SMEs is still in its infant stage. This chapter will set the stage for future research on open innovation in SME. First, we discuss the specific nature of open innovation in SMEs and map the field of open innovation research on SMEs. Against this background, we propose a future research agenda and discuss four key areas of future open innovation research in SMEs which have not yet sufficient attention among researchers: IT-enabled crowdsourcing in SMEs for involving a large number of unknown “outsiders”, the importance of different kinds of networks – personal, R&D and value networks - when SMEs engage in open innovation, the interplay of IP management and open innovation in SMEs, the internal dimensions of managing open innovation in SMEs. We present case examples to illustrate the relevance of these areas and introduce a range of research questions to stimulate researchers to join an exciting and promising research area.

08

Open Innovation in Multinational Corporations: New Insights from the Global R&D Research Stream 

Kazuhiro AsakawaJaeyong Song and Sang-Ji Kim

In spite of the rapid expansion of the open innovation phenomenon in business and the great research interest in this topic over the past decade, only limited attention has been paid to the international dimension of open innovation. To fill such a gap, we propose that literature on global R&D can complement the open innovation literature by adding the geographic perspective. Although recent international R&D literature sheds light on the role of location-specific factors in the global open innovation cycle, i.e., the sourcing and leveraging of globally dispersed knowledge, the research streams on global R&D and open innovation have typically been treated as two separate intellectual endeavors. We argue that incorporating insights gained from the global R&D literature can contribute to the depth and breadth of our understanding of open innovation. At the same time, we suggest potential area of contribution the open innovation literature can make to the research on global R&D management. We conclude this chapter by examining how research on global open innovation should evolve in the future and by suggesting some emerging research agendas that we find promising.

09

Open Social Innovation 

Henry Chesbrough and Alberto Di Minin

Open innovation has largely been studied in the private, for-profit sector of the economy in different countries around the world. In this chapter, we consider the less examined role that open innovation is playing in public agencies and in non- profit organizations and we define Open Social Innovation (OSI) to be the application of either inbound or outbound open innovation strategies, along with innovations in the associated business model of the organization, to social challenges. While many elements of open innovation remain quite relevant to these different kinds of organizations, there are differences that must be considered when applying open innovation to them. We sketch these differences using qualitative evidence and secondary research, with a particular emphasis on three mini-cases: the City of Birmingham England’s child welfare agency, Emergency and Ashoka.

10

Open Innovation and Intellectual Property: A Two-Sided Market Perspective 

- Henry Chesbrough and Roya Ghafele

Open innovation has many implications for managing intellectual property. Traditional IP management practices place a high value on secrecy and control, practices that discourage knowledge sharing and collaborative innovation activity. Organizations that have adopted Open Innovation have modified their IP management to take advantage of Open Innovation‟s benefits, while striving to manage its risks. Outside-in open innovation requires careful arrangements with contributors from both private parties and public communities to enhance one‟s own innovation activities. Inside-out open innovation involves crafting the terms on which other parties have the opportunity to carry one‟s own ideas and technologies out to other markets. In this chapter, we frame the question of managing intellectual property as a two-sided market. We consider both the buy side and sell side of this market, and argue that the market is currently rather inefficient. Finally, we identify barriers to the market‟s efficient operation, and consider institutional factors that could stimulate the advance of this market.

11

Managing Inside-Out Open Innovation: The Case of Complex Ventures 

- Henry Chesbrough and Chris Winter

Outside-in Open Innovation is widely adopted by companies and also the type of open innovation most often studied by academics. Yet there is a second half to the open innovation model: the Inside-Out portion. In this chapter, we examine the underpinnings of the Inside-Out model, and sketch a number of applications of it. In particular, we look at why corporations are well-advised to allow internal projects to go to the outside, through a corporate venture spinout process. We identify a particular, novel kind of spin-out, the complex spin-out venture. Complex spin-outs require extensive integration of multiple technologies and assets in the formation of the venture, a process where a corporation may have a natural advantage over traditional venture capital. Complex spin-out ventures can create new options for the company, support business model innovation, and lead to competitively advantaged ventures that traditional VC is not well suited to achieve.

12

Patterns of Implementation of OI in MNCs 

Letizia Mortara and Tim Minshall

This chapter reviews the evidence on Open Innovation adoption in large multinational corporations (MNCs) drawing upon and highlighting the benefits of longitudinal case studies to research this complex issue. Chesbrough‟s articulation of the OI Model in 2003 represents a discontinuity in the adoption of OI which has changed OI implementation from an emergent phenomenon to one of planned change. Consequently, studies of OI adoption need to choose appropriate theoretical bases, and make use of longitudinal analyses and ethnographic research to monitor the changes in implementation over time. From an analysis of the current OI implementation research, this chapter develops a framework that expands on the theory of implementation and provides elements needed for this process analysis of OI implementation. These elements are divided into high-level traits of OI implementation; internal factors and social dynamics; enablers and barriers and evaluation methods for OI implementation success.

13

Getting Help From Innomediaries: What Can innovators Do to Increase Value in External Knowledge searches? Nadine RoijakkersAndy Zynga and Caroline Bishop

Several articles have recently arisen on the intermediated Open Innovation (OI) services offered by innomediaries such as Ninesigma, IXC, InnoCentive, Yet2com, and others and the value that innovating companies can potentially derive from using these intermediated services in each of the phases of their external knowledge searching, i.e. orientation, exploration, selection, and engagement. It turns out, however, that some innovating companies are benefiting more from usingintermediated services than others. These differences in the value derived from interacting withinnomediariescan partly be linked to the actions innovating companies take internally to add to their potential to generate value.The purpose of this chapter is to identify what innovating companies can doto increase value when they engage with innomediaries in external knowledge searches andthus increase the likelihood of signing beneficial agreements with solution providers.

14

Theories of the Firm and Open Innovation 

Wim Vanhaverbeke and Myriam Cloodt

Open innovation (OI) has only sporadically been related to existing theoretical frameworks such as transaction cost economics, the relational view, resource-based view, etc. In this chapter, we start with the need to connect OI to business and corporate strategy. Next, the relations with external partners can be examined in terms of transaction costs or transaction value. We argue that open innovation is not about minimizing transaction costs but to optimize the transaction value between the partners. In our attempt to connect open innovation to existing theories and theoretical concepts, we found that: (1) open innovation largely neglected the link with firms‘ business and corporate strategy; (2) some theories are more in line with the phenomenon of open innovation than others; (3) most theories that can be aligned with open innovation still have to be adapted to grasp a particular dimension of open innovation; (4) open innovation is a complex, multi- dimensional phenomenon which compels us to combine different perspectives into a broader, dynamic framework.

15

Conclusion: Surfing the New Wave of Open Innovation Research

Wim Vanhaverbeke, Joel West and Henry Chesbrough

In this final chapter, we synthesize the contributions of the different chapters in this volme to the open innovation literature, and suggest likely directions going forward. We also focus on a range of application areas of open innovation that in our opinion have not received sufficient attention in the past and which were not covered in this book. Finally, we identify trends and suggest opportunities for future research in the area of open innovation.

Contact

w.vanhaverbeke AT surrey.ac.uk

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