An exploratory study of Open Innovation practices in Europe and their impact on firms’ global innovation networks


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Innovation is a core business necessity, thus companies that do not innovate die. Many academics and practitioners have emphasized the value of innovation as a fruitful way for firms to enhance their business performance and prosper (Collins & Porras, 1994; Christensen, 1997; De Geus, 1997; Cobbenhagen, 2000; Tidd et al., 2005; Porter, 1983; 1985; Kelly, 2004; Drucker, 2007; Hamel et al., 1989; Brown, 2003; Schumpeter, 1934; Johnson et al. 2005). In addition, an effective knowledge and innovation management strategy may become an important source of competitive advantage in various industries (Kay, 1993; Porter, 1983; 1985; Schumpeter, 1934; Johnson et al. 2005). Nevertheless, in today’s turbulent world, where change and diversification are strategic constants, companies cannot afford to merely rely upon their central R&D departments for the development of new products or services. Hoping that what is cooking in the lab will turn up trumps is not a reasonable approach for a custodian of stockholder value in a ‘hypercompetitive environment’ (D’Aveni, 1994). Very often, successful innovation results from the planned and deliberate combination of ideas, people, and objects from inside and outside the organization that spark new technological revolutions, sought after service concepts and effective business models (Boutellier et al., 2000).
The book ‘Open Innovation’ by Henry Chesbrough (2003d), describes an innovation ‘paradigm shift’ (Kuhn, 1962) from a closed to an open model. The open model has taken on greater saliency in light of the recent debate about globalization, Information & Communication Technology (ICT) developments and the emergence of collaborative and cross-cultural groups such as the Open Source Software (OSS) movement (Maxwell, 2006). As Don Tapscott (2007: 20) pointed out “a new kind of business is emerging – one that opens its doors to the world, coinnovates with everyone, shares resources that were previously closed guarded, harness the power of mass collaboration, and behave not as a multinational but as something new: a truly global firm”. As a matter of fact, according to Friedman (2005) and Chandler (1990) there are fewer economies of scale in R&D than there were a generation ago as a consequence of rising development costs and shorter product life cycles (Chesbrough, 2006; 2007).

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An exploratory study of Open Innovation practices in Europe and their impact on firms’ global innovation networks

  1. 1. Research Methodology: qualitative semi-structured interviews An exploratory study of Open Innovation practices in Europe and their impact on firms’ global innovation networks
  2. 2. What is Open Innovation? Closed Innovation model Open Innovation model
  3. 3. What is Open Innovation?
  4. 4. Research Objectives and Questions <ul><li>Research Obj. >> To investigate the diffusion of Open Innovation paradigm in Europe </li></ul><ul><li>Q1 : Are European companies across multiple industries utilizing concepts consistent with the Open Innovation paradigm? </li></ul><ul><li>Q2 : What are the primary concepts being successfully employed in Europe and what practices do these concepts embody? </li></ul>
  5. 5. <ul><li>To what extent does your internal R&D satisfy your company technology needs? Explain. </li></ul><ul><li>Can you recall an episode or a period when your company experiences difficulties in sustaining its internal innovative capabilities to compete in the market? </li></ul><ul><li>Does your company make a practice of looking to bring in outside IP and technology? Is this done opportunistically or do you have a formal, systematic way to do so? </li></ul><ul><li>How would you explain your efforts to take out technology? </li></ul><ul><ul><li>a. When something is developed initially that doesn’t fit with the business model, do you have a practice of taking the IP or technology asset out to the marketplace? </li></ul></ul><ul><ul><li>b. When something that was initially developed internally is deemed “dead”, are efforts made to find companies or partners that might be interested in it? Is this done opportunistically or there is a formal mechanism to do this? </li></ul></ul>From the Interview
  6. 6. Global Innovation Networks <ul><li>New R&D organizational strategies: </li></ul><ul><li>open transnational innovation processes described as locally leveraged and globally linked (Bartlett et al., 2003). </li></ul><ul><li>In US companies spent more than US$ 5 billion for R&D conducted outside their firms, including contracts to other companies, universities, and non-profit organizations” (Boutellier et al., 2000: 18) </li></ul><ul><li>Another US government research shows that the usual targets of these investments are emerging countries where there is an increase of technological competence and trained scientists (Garten, 1996). </li></ul>
  7. 7. <ul><li>Research Obj. >> To examine how Open Innovation practices are utilized by European firms in their innovation operations across national boundaries </li></ul>Research Objectives and Questions Q3: How do European companies employ Open Innovation in their innovation processes across national boundaries?
  8. 8. <ul><li>Where do you typically search for external ideas and technology: e.g. universities, start-ups, competitors, conferences, third parties (“innomediaries”)? </li></ul><ul><li>Are these creative sources found merely within your company home country or do you look for outside technology and ideas even across national boundaries? </li></ul><ul><li>How would you characterize your company innovation model: </li></ul><ul><ul><li>a. Would you say that new opportunities are usually sensed in the home country and implementation involves merely driving the innovation through subsidiaries whose role is to introduce the innovation to their local market? ( Center-for-global model) </li></ul></ul><ul><ul><li>b Do subsidiaries perceive local opportunities and use their own resources and capabilities to create innovative responses that are then implemented in the local market? ( Local-for-local model) </li></ul></ul><ul><ul><li>c. Does your company ensure that the special resources and capabilities of each national subsidiary are available not only to that local entity, but also to other company units worldwide? ( Locally leveraged model) </li></ul></ul><ul><ul><li>d. Does your company pool the resources and capabilities of many different units – at both the parent company and subsidiary level – to jointly create and manage an activity? ( Globally linked model) </li></ul></ul><ul><li>To what extent does your model of innovation help to identify and bring in outside technology and ideas located in other markets than your home country? Explain how. </li></ul>From the Interview
  9. 9. Thank you Full study available @: Open Innovation “ not all the smart people work for you”