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Social media (SM) allow users to easily create, edit, or share content. The vast numbers of individuals that converge around sites like LinkedIn, Facebook, or Twitter embody a rich source of external knowledge that could be utilized for new product development (NPD). Complementing other channels for open innovation (OI), SM can provide access to novel information about customer needs and technological solutions unknown to the firm. Anecdotal evidence suggests that there are considerable benefits from using SM during an innovation project, but empirical evidence is scarce. Contributing to the perspective of openness in search, a number of hypotheses propose how SM as a new channel for OI can contribute to firm performance. This model is tested using data from the PDMA Comparative Performance Assessment Study, identifying factors influencing the relationship between SM and NPD performance. The findings indicate that utilizing information from SM channels can lead to higher performance, but that this link is influenced by the formalization of a firm's NPD process. This study also finds that the ability of a firm to benefit from external search in SM strongly depends on complementary internal processes when organizing and conducting this activity. Furthermore, managers have to take care when utilizing information from SM channels in radical projects, as for this kind of project only a weak significant performance contribution of SM could be found.

In recent years, crowdsourcing has emerged as a promising open innovation strategy for firms searching for solutions to technical problems. Previous research has shown that crowdsourcing can provide quick access to distant knowledge at relatively low costs, when compared to other forms of innovation governance such as internal sourcing or contract research. Recent studies, however, indicate that firms differ considerably in their ability to reap the benefits from crowdsourcing. Drawing upon recent work on the microfoundations of capabilities, we hypothesize how three types of lower level organizational elements may affect gains from crowdsourcing: informal organizational roles, formal organizational roles, and knowledge processes. Following a mixed‐method research design and drawing on rich quantitative and qualitative data, we find that informal and formal organizational roles work through processes of knowledge articulation and codification in developing a firm’s crowdsourcing capability. By going beyond the direct effects of the three antecedents, our research sheds light on the process of capability development for open innovation.

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