Conceiving and Marketing Products in the Networking Age
Chapter 5: From Collaborative to Distributed Innovation
5.1 INTRODUCTION One of the managerial advances that have resulted from the widespread deployment of ICT is the ability to greatly enhance a ﬁrm’s innovation capacity by leveraging external knowledge resources beyond individual customers. While the importance of absorbing external knowledge to support innovation has been understood for some time (for example, Cohen and Levinthal, 1990; Zahra and George, 2002), ﬁrms have historically been limited in their ability to reach beyond their boundaries for innovative ideas. This limitation is the result of a variety of factors, including the absence of open standards for communication and the idiosyncrasy of knowledge (Arora and Gambardella, 1994). Consequently, the interorganizational division of innovative labor has traditionally been limited to a few specialized industries such as biotechnology (Shan et al., 1994; Powell et al., 1996), pharmaceuticals (Cockburn et al., 2000), and the automotive industry (Langlois and Robertson, 1995; Dyer and Nobeoka, 2000). This situation has begun to change dramatically with the emergence of the Internet as an open, global and ubiquitous platform for communication. The Internet has opened new doors to ﬁrms seeking to create new organizational mechanisms to support their absorptive capacities. Enhanced connectivity through the Internet allows diﬀerent actors in the markets to become contributors and collaborators in innovation (Iansiti and MacCormack, 1997; Prahalad and Ramaswamy, 2004). Internetenabled virtual environments oﬀer ﬁrms new avenues to interact with suppliers (Thomke and Kuemmerle, 2002). Web-based communities enable a highly decentralized approach to innovation activity involving large numbers of independent contributors. It is important...
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