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How Standards Research Can Inform Open Innovation

  1. 1 Joel West Professor, Keck Graduate Institute Associate Editor, Research Policy 29 June 2016 How Standards Research Can Inform Open Innovation EURAS 2016
  2. 2 Overview • Standards and standardization were open innovation before there was an “open innovation” • Also true for co-opetition • Thus EURAS research is relevant to a broader audience • Publication opportunity: • Beyond focusing on just standards outcomes • Instead addressing broader questions • to be cited by both standards and other researchers
  3. 3 Prior Research
  4. 4 Standards Research • Standardization activities, processes • SSOs, SDOs, alliances, consortia • Technical compatibility standards • As artifacts, actors or institutions • Proprietary, open or shades of gray • Technical and organizational modularity • Platforms, ecosystems and third party complements • Shared implementations via open source software (OSS)
  5. 5 Co-opetition A firm “is your complementor if customers value your product more when they have the other [firm’s] product than when they have your product alone.” - Brandenburger and Nalebuff (1996)
  6. 6 Open Innovation • “Open innovation” coined by Chesbrough (2003) • New paradigm covers both new and existing processes • Considerable interest in research and practice
  7. 7 Open Innovation (1) “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.” — Chesbrough (2006)
  8. 8 Open Innovation (2) Not all firms can profit from all innovations Contingent upon creating a business model • Value creation • Sustainable value capture • Embedded in a value network of suppliers, complementors and customers Chesbrough (2003, 2006a, 2006b); Chesbrough & Rosenbloom (2002); Vanhaverbeke & Chesbrough (2014)
  9. 9 Open Innovation (3) Three modes of open innovation: 1. Inbound: accessing external innovations to improve a firm’s innovations 2. Outbound: using external markets to commercialize those innovations 3. Coupled: combining inbound & outbound flows to innovate inside (or outside) the firm Gassmann & Enkel (2004), Enkel et al (2009), Piller & West (2014)
  10. 10 Open Innovation (4) Our interest is the network form • Coupled or inbound • Peer-to-peer (Powell 1990) or hub-and-spoke These include • Communities • Consortia • Ecosystems • Platforms West (2014)
  11. 11 Relates to Standards • Simcoe (2006): open standards have optimal tradeoff between public value creation and private value capture • Vanhaverbeke & Cloodt (2006): managing networks for value creation and capture • West (2006): interdependent networks of complementors and suppliers in systems products • Dittrich & Duysters (2007): leveraging OI networks to define and implement standards • West & Lakhani (2008): communities and open innovation • West & Wood (2013): neglecting complementor value capture leads to collapse of platform ecosystem
  12. 12 Research Opportunities
  13. 13 Importance of Framing For reviewers and editors, framing is essential • What is your paper about? • What literature does it build upon? • What do you promise to deliver? You have a choice of framing • Same study can be framed different ways • Framing must align to actual data, findings and contribution • Some ways will have more impact than others
  14. 14 Narrow Framing This paper “shows how victory in a standards competition can be negated by the introduction of a new architectural layer that spans two or more previously incompatible architectures.”† • Study of IBM’s PC strategy in Japan • Relevant to platforms and standards architectures • Beyond that: ???? † West & Dedrick (2000)
  15. 15 Broad Framing “This article … describes the use of innovation networks as a means to adapt swiftly to changing market conditions and strategic change.”† • Study of Nokia’s value creation networks • Relevant to alliances, network management, mobile telephony, ecosystems, innovation exploration/exploitation † Dittrich & Duysters (2007)
  16. 16 Approach Requires joining another literature How could this inform a broader audience? • What research has studied similar phenomena? • What is the same and different? • What terms/concepts are different? • Who are the key authors? Don’t include too many literatures in one study
  17. 17 Standardization Possible themes • Tension of public/private gain • Bilateral/multilateral alliances • Creating/joining enduring or ad hoc institutions • Governance, voice, permeability, openness • Knowledge flows • Effects/limits of intellectual property
  18. 18 Compatibility Standards Possible themes • Modularity • Technical • Organizational: “Mirroring” hypothesis • Refactoring/coordination • Tacit/explicit knowledge • Creating/evolving product architectures • Interdependence of public/private architectures
  19. 19 Platforms Possible themes • Ecosystems • Identifying, incentivizing complementors • Too much vs. too little friction (excess entry) • Free vs. “free” vs. proprietary complements • Platform evolution • Linkage of technical and interorganizational components • Degrees of openness
  20. 20 OI Opportunities • Inbound (or coupled) open innovation: evidence of improved firm success • Coupled open innovation: interdependence of inflows and outflows • Network forms: interdependence of partner success • Role of not-for-profit or individual actors Vanhaverbeke et al (2014); West (2014); West & Bogers (2014); West et al (2014)
  21. 21 Conclusions
  22. 22 Conclusions • Standards research is relevant to a broader audience • It is possible to study standards topics and address multiple audiences • Both greater costs and greater potential rewards • At the same time, it is important to stay true to the phenomenon (an emic perspective) • “To thine own self be true” — Hamlet, Act 1, Scn 3
  23. 23 Thank You!