This paper reviews research on open innovation that considers how and why firms commercialize external sources of innovations. It examines both the “outside‐in” and “coupled” modes of open innovation. From an analysis of prior research on how firms leverage external sources of innovation, it suggests a four‐phase model in which a linear process—(1) obtaining, (2) integrating, and (3) commercializing external innovations—is combined with (4) interaction between the firm and its collaborators. This model is used to classify papers taken from the top 25 innovation journals, complemented by highly cited work beyond those journals. A review of 291 open innovation‐related publications from these sources shows that the majority of these articles indeed address elements of this inbound open innovation process model. Specifically, it finds that researchers have front‐loaded their examination of the leveraging process, with an emphasis on obtaining innovations from external sources. However, there is a relative dearth of research related to integrating and commercializing these innovations. Research on obtaining innovations includes searching, enabling, filtering, and acquiring—each category with its own specific set of mechanisms and conditions. Integrating innovations has been mostly studied from an absorptive capacity perspective, with less attention given to the impact of competencies and culture (including “not invented here”). Commercializing innovations puts the most emphasis on how external innovations create value rather than how firms capture value from those innovations. Finally, the interaction phase considers both feedback for the linear process and reciprocal innovation processes such as cocreation, network collaboration, and community innovation. This review and synthesis suggests several gaps in prior research. One is a tendency to ignore the importance of business models, despite their central role in distinguishing open innovation from earlier research on interorganizational collaboration in innovation. Another gap is a tendency in open innovation to use “innovation” in a way inconsistent with earlier definitions in innovation management. The paper concludes with recommendations for future research that include examining the end‐to‐end innovation commercialization process, and studying the moderators and limits of leveraging external sources of innovation.

Open innovation is a powerful framework encompassing the generation, capture, and employment of intellectual property at the firm level. We identify three fundamental challenges for firms in applying the concept of open innovation: finding creative ways to exploit internal innovation, incorporating external innovation into internal development, and motivating outsiders to supply an ongoing stream of external innovations. This latter challenge involves a paradox, why would firms spend money on R&D efforts if the results of these efforts are available to rival firms?To explore these challenges, we examine the activity of firms in open source software to support their innovation strategies. Firms involved in open source software often make investments that will be shared with real and potential rivals. We identify four strategies firms employ -pooled R&D/product development, spinouts, selling complements and attracting donated complements -and discuss how they address the three key challenges of open innovation. We conclude with suggestions for how similar strategies may apply in other industries and offer some possible avenues for future research on open innovation.

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Most research on open source software communities has focused on those that are community founded. More recently, firms have founded their own open source communities. How do sponsored open source communities differ from their autonomous counterparts? With comparative examination of 12 open source projects initiated by corporate sponsors, we identify three design parameters that together help form a participation architecture—the opportunity structure extended to potential external contributors. In exploring sponsors' community design decisions, we found that sponsored open source projects were more likely to offer transparency than they were accessibility and that this had implications for their communities' growth. We contribute theoretical constructs that offer a common basis of comparison for the future study of open source projects and illustrate how the tension between control and growth affects open source community design and creation.Open source, governance, innovation communities, architecture, participation,

Research on open source software, user innovation and open innovation have increasingly emphasized the role of communities in creating, shaping and disseminating innovations. However, the comparability of such studies has been hampered by the lack of a precise definition of the community construct. In this paper we review prior definitions (implicit and explicit) of the community construct, and other suggestions for future research.Innovation communities, open source, open innovation, user innovation,

Interest in open innovation (OI) as a field of research has grown exponentially since the phrase was coined by Chesbrough in his 2003 book, with numerous articles, special issues, books, and conference sessions. Various reviews of the literature have summarized prior work, offered new frameworks, and identified opportunities for future research. Here we summarize these opportunities, which include more research on outbound OI, the role of open innovation in services, and network forms of collaboration such as consortia, communities, ecosystems, and platforms. Research should also examine the use of OI by small, new, and not-for-profit organizations, as well as the linkage of individual actions and motivations to open innovation. Other opportunities include better measuring the costs, benefits, antecedents, mediators and moderators of the effects of OI on performance, and understanding why and how OI is rejected, abandoned, or fails. Finally, we consider how OI can be better linked to prior theoretical research, including topics such as absorptive capacity, user innovation, resources, dynamic capabilities, business models, and the definition of the firm.

Research from a variety of perspectives has argued that innovation no longer takes place within a single organization, but rather is distributed across multiple stakeholders in a value network. Here we contrast the vertically integrated innovation model to open innovation, user innovation, as well as other distributed processes (cumulative innovation, communities or social production, and co-creation), while we also discuss open source software and crowdsourcing as applications of the perspectives. We consider differences in the nature of distributed innovation, as well as its origins and its effects. From this, we contrast the predictions of the perspectives on the sources, motivation and value appropriation of external innovation, and thereby provide a framework for the strategic management of distributed innovation.

Research Summary Strategic openness—firms voluntary forfeiting of control over resources—seemingly challenges the premise of the resource‐based view (RBV), which posits that firms should control valuable, rare, and inimitable (VRI) resources. We reconcile this apparent paradox by formalizing whether and when firms—consisting of resource bundles and deriving competitive advantage from exploiting selected VRI resources—may maximize profitability by opening parts of their resource base. As such, our article refines RBV‐related thinking while supporting the theory's core tenets. Notably, we illustrate how a common‐pool resource can become a source of competitive advantage and how firms may use openness to shape inter‐firm competition. Managerial Summary Conventional wisdom holds that firms must control scarce and valuable resources to obtain competitive advantage. That being said, over the past decade, many firms—among them Computer Associates, IBM, and Nokia—embarked on open strategies and made parts of their valuable resources available for free. These decisions pose an obvious conundrum, which we solve in our article. We use a mathematical model, grounded in principles of the resource‐based view, to show why and under what conditions open strategies will succeed. Firms significantly improve their performance when (a) opening resources reduces their cost base while (b) strongly increasing demand for their still‐proprietary resource(s). We also explain how openness can reshape markets by weakening competitors, particularly in highly rivalrous environments.