Knowledge Integration in Open Innovation
This research explains the effects of knowledge integration in open innovation by analyzing processes and their outcomes, costs and underlying mechanisms and processes. A mixed-method approach is used, combining results from a quantitative survey study and in-depth qualitative evidence from Swedish firms. The research is performed in close collaboration with international researchers from four countries. The contribution of the project is twofold. First, this research explains the relevance of KI to existing research on OI. This helps to clarify why and how OI projects fail and succeed. Second, the results from this project detail the relational and transactional mechanisms designed to enhance the appropriation of OI. This implies that firms that conduct KI efficiently are able to achieve higher innovation capabilities.
The purposes of the project have been to identify and explain the effects of external knowledge searches and knowledge integration in open innovation and to determine its wider consequences for the management of innovation. To fulfill these purposes, empirical studies have been conducted in the project that have addressed research questions related to, for instance, the effects of knowledge search and integration on open innovation performance, when and how external knowledge integration (KI) begins and knowledge sharing ends, how knowledge integration processes and mechanisms enfold, the role of intellectual property rights in open innovation, and the implementation of open innovation.
The project was executed based on a mixed-method approach, combining qualitative and quantitative research designs. Empirical findings were mainly obtained drawing upon a quantitative survey study and in-depth qualitative evidence from Swedish and international firms. The quantitative study consisted of a large-scale, cross-sectional survey that was performed in close collaboration with international researchers from Italy, Finland and Sweden. The qualitative studies were built on case studies at several Swedish industrial firms, a study of international innovation intermediaries, an in-depth case at one Brazilian and several Austrian firms.
The project has emanated in a number of important contributions. The findings drawing upon the quantitative study are primarily threefold. First, the results show that there is a positive effect of knowledge integration on open innovation performance. Based the cross-sectional survey study, and drawing on the literature on knowledge governance, the results point to what distinguishes collaborative inbound open innovation as a subset of inbound open innovation and distinct from market-based inbound open innovation. Using a knowledge-based conceptualization of collaborative inbound open innovation, the findings suggest that the choice of knowledge governance plays a pivotal role in innovation performance. Our findings also show the significance of the knowledge content of open innovation collaboration. We make a distinction between explorative knowledge content in terms of advanced technologies, innovative products and processes, and exploitative knowledge content, including reliable delivery, supply chain management responsibility, project management and improvement capability. The results show that the negative effects of having too many partners do not apply to all kinds of open innovation collaboration. The results instead indicate that successful firms apply a selective open innovation strategy characterized by leveraging and limiting boundary crossing in open innovation collaboration.
Second, the cross-sectional survey study has provided evidence on how two governance procedures — project management and knowledge matching — influence innovation performance. We could demonstrate the distinct effects of project management and knowledge matching by relating them to partner breadth, i.e. the number of different types of partners, in collaborative inbound open innovation. We propose that project management is a governance procedure primarily involving formal attributes that enable alignment of diverging interests and motivations among collaborating parties. We propose also that knowledge matching promotes informal relations that help to coordinate the flow of specialized — sometimes tacit — knowledge from partners. Our study shows that knowledge matching is important regardless of the number of types of partners, while increased partner breadth results in more divergent motivations to contribute, resulting in a need for project management to align and control the partners.
Third, the results demonstrate how the use of different kinds of intellectual property protection mechanisms (IPPMs) affects open innovation performance across the different phases of the innovation process and related to the partners’ geographical location. The findings show that in early stages of the innovation process, open innovation performance in terms of efficiency of the collaboration is positively linked to the use of semi-formal appropriability mechanisms, such as contracts, yet negatively related to the use of formal ones, such as patents. Considering location, the results show that semi-formal or informal IPPMs are mainly valid in relation to national partners, whereas formal appropriability explains international collaborations.
The findings drawing upon the additional qualitative studies are primarily fourfold. The case studies at Swedish industrial firms reveal that firms devise knowledge integration approaches in buyer-supplier collaborations through either coupling or decoupling knowledge sharing and knowledge combining processes, depending on the knowledge input of the supplier and the buyer. The results from these case studies also show that the knowledge input, technical capability and locus of initiative influence knowledge integration approaches throughout the different phases of product development processes.
Second, the study of innovation intermediaries shows that problem search in innovation contests involves simultaneously the consideration of two dimensions, i.e. search space and search heuristics, as one-dimensional path constructs fail to recognize a range of search paths available in open innovation. The combination of two search dimensions creates four search paths: situated, analogical, sophisticated, and scientific.
Third, based on a study of a European mature company, with a long history of success, relatively little disruption, and competitive advantage based on core technologies, we find that open innovation may be a mechanism to overcome organizational inertia.
Fourth, we have responded to recent calls of further open innovation research in emerging markets i.e. Brazil. We have extended existing knowledge about the micro-foundations of dynamic capabilities and explain why strategic goal orientation and goal alignment is necessary to build innovation capabilities and to harness the benefits of unidentified national resources.
The project has been performed as embedded in a wider network of national and international contacts. The survey study has been carried out in direct collaboration with researchers from Sweden, Italy, Finland and Brazil. We have particularly collaborated with Assistant professor Valentina Lazzarotti and Associate professor Rafaella Manzini from the University of Carlo Cattaneo in Castellanza, and Associate professor Luisa Pellegrini from the University of Pisa. Together, we have written several conference and journal contributions. Further, the project team members have contacts with important international researchers within the field of knowledge integration and open innovation. During the project, we have established a close research collaboration with Professor Keld Laursen from Copenhagen Business School, an authority in the field. He has contributed with knowledge on open innovation knowledge searches and governance and also provided important input on methodology issues. The results of the project are also considered in relation to the work of other Swedish researchers in the field of open innovation in a book edited by two of the project members. The book brings together our work and the work of other Swedish researchers and provides an overview of the implications of open innovation aiming at disseminating research results to practitioners and students of open innovation.
The project has generated several new research questions. For instance, our results on knowledge integration processes and knowledge governance procedures have generated a further interest on how firms govern their collaborative projects using firm-specific procedures, routines and capabilities. In addition, there may be circumstances that could give rise to heterogeneity across the firm’s various collaborative projects — for instance, related to the level of innovation novelty. Further, the issue of how open innovation in general could best be governed over the phases of the innovation process, and in the case of involvement of a few or many partners, still appears to be an exciting area for future research. More specifically, how the benefits of open innovation are appropriated, combined with the choice of governance, have so far not been explored. The research also has generated further potential questions in relation to micro-foundations of dynamic capabilities which are necessary for the implementation of open innovation in relation to recognizing opportunities and threats, implementing new infrastructures, and knowledge governance procedures. Based on the work in the project, initiatives to perform a second round of the open innovation survey have been taken to further study open innovation a larger international context and including more countries.
The results of the study are published in nine published articles in scientific journals, 26 conference contributions and presentations, two chapters in an edited book published at Oxford University Press, and one edited book by two of the project members. The book gathers research results of Swedish researchers in the field of open innovation and aims at disseminating these results to practitioners and students of open innovation. Eight of the chapters in the book present parts of the results that were generated in the context of the project. Results of the project are continuously implemented in teaching, in lectures as well as seminars and cases in courses on innovation management, project management and also in executive education.