Academic journal article Research-Technology Management

The Adoption of Open Innovation in Large Firms: Practices, Measures, and Risks

Academic journal article Research-Technology Management

The Adoption of Open Innovation in Large Firms: Practices, Measures, and Risks

Article excerpt

A survey of large firms examines how firms approach open innovation strategically and manage knowledge flows at the project level.

Since the publication of Chesbrough's seminal book in 2003, open innovation has attracted growing managerial attention, particularly among large firms. Substantial empirical evidence demonstrates that large firms increasingly make purposive use of external inputs from other parties, or allow others access to their underutilized assets and knowledge, in order to improve their R&D productivity. Prior work shows that open innovation is likely to remain pervasive as a component of R&D in large firms (Chesbrough 2003; Chesbrough and Brunswicker 2014). Further, firms are evolving in their application of open innovation, engaging in a variety of practices, from traditional bilateral arrangements (like alliances) to approaches (like communities) that involve multiple parties in an interactive relationship (Bagherzadeh and Brunswicker 2015). In some cases, firms even share internal knowledge without any immediate financial compensation (Dahlander and Gann 2010). As they have experimented with new forms of open innovation, firms have also sought new ways of managing and measuring its impact (Fetterhoff and Voelkel 2006). However, open innovation has not been sufficiently formalized, and, as our last survey revealed, managers are not satisfied with the routines and metrics available to them (Chesbrough and Brunswicker 2013).

The literature provides little assistance in this regard. Managers can look at project-level case studies, some of them published in RTM (see, for instance, Allarakhia 2011; Kirschbaum 2005). However, such cases usually focus on a single project. This makes it difficult to understand what works across different projects. Another set of studies, including our own, focuses on the firm or business unit (Chesbrough and Brunswicker 2013, 2014; Laursen and Salter 2006, 2014). While these data are useful, managers need a more fine-grained analysis to manage open innovation at the project level, where many important decisions are made. As others have pointed out, larger project-level studies are needed to advance the practice of open innovation (Du, Leten, and Vanhaverbeke 2014).

This study of open innovation in large firms, a continuation of the work described in our 2014 article, is set against this background. In addition to continuing the efforts begun in that first study to deepen understanding of how open innovation is adopted at the firm level, this study adds a focus on the project level. We also make a first attempt to respond to researchers' call to examine not only successes but also failure cases (Tucci et al. 2016). In addition to confirming that open innovation remains a general trend, these new findings provide new insights into important questions about the management of open innovation at the project level: Which practices do firms use across the different project activities? How openly do they share knowledge, if at all? Have firms matured and started to manage open innovation projects in a more formalized and structured way?

About the Study

This study asked large, global companies about their open innovation practices through a 17-question survey, which extends our prior survey in order to allow for comparability of results. Each question comprised multiple items. As in our 2014 study, the survey questions moved beyond the two most widely used measures of openness--breadth (the number of sources accessed) and depth (the intensity of interaction with a single source)--to ask about the role of different open innovation practices, this time at the project level as well as the firm level. Further, we introduced additional measures to allow a more fine-grained analysis of the state of openness at the project level.

The survey was organized in two sections; the first section asked about the adoption and management of open innovation at the firm level (6 questions), and the second focused on the project level (11 questions). …

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