Managing Open Innovation

Managing Open Innovation

Connecting the Firm to External Knowledge

André Spithoven, Peter Teirlinck and Dirk Frantzen

Open innovation is about firms’ external relations with other firms and organisations. It is a topic which has attracted an immense amount of attention, but which has also been heavily criticised due to the diversity of the ideas and fuzziness of its key concepts. To date, the bulk of the literature on open innovation draws on case study material to illustrate the operation of firms in an anecdotal way. By contrast, this book examines open innovation practices by using large-scale datasets and stresses their impact on firm performance. The authors examine four key issues: differences between firms in open innovation practices, public funding to enhance external relations, R & D outsourcing of firms, and the role of human resources in R & D and innovation.

Chapter 2: Firm-level Effects of Incoming Knowledge Spillovers, Research Collaboration and Strategic Appropriability

André Spithoven, Peter Teirlinck and Dirk Frantzen

Subjects: business and management, knowledge management, organisational innovation, economics and finance, economics of innovation, innovation and technology, economics of innovation, knowledge management, organisational innovation


2.1 INTRODUCTION For a long time the innovation process has been regarded as a closed system: innovation remained largely internal to the firm. Hence the existence of a large body of innovation literature with a ‘black box’ content when it comes to describing the external knowledge environment in which a company operates (see Tidd et al., 1997; Afuah, 1998; Trott, 1998). It is becoming more widely accepted today that incoming knowledge spillovers and research collaboration make a beneficial contribution to the flexibility of the firm by enhancing its access to knowledge beyond its boundaries (Quinn, 2000; Fritsch and Lukas, 2001; Chesbrough, 2003a; Coombs et al., 2003; Huston and Sakkab, 2006). Moreover, ideas on the incorporation of external knowledge have evolved from cost reduction to actual contribution to innovation efforts. Additionally, one of the key issues in innovation lies in the appropriation of its results (Teece, 1986; Dosi et al., 2006). The ways in which firms handle knowledge flows, either through incoming spillovers or collaborative results, and the ways in which they are converted into new products or sold in disembodied form, are caught by introducing the role of the business model in capturing value from innovation (Chesbrough and Rosenbloom, 2002; Chesbrough, 2003a). The aim of this chapter is to incorporate all of these elements into a general framework of analysis pertaining to the relationship between innovative efforts and firm performance and to emphasise that every firm has its own particularity. The majority of empirical studies are about making general statistical...

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