A Capability‐Based Framework for Open Innovation: Complementing Absorptive Capacity

Abstract

We merge research into knowledge management, absorptive capacity, and dynamic capabilities to arrive at an integrative perspective, which considers knowledge exploration, retention, and exploitation inside and outside a firm's boundaries. By complementing the concept of absorptive capacity, we advance towards a capability-based framework for open innovation processes. We identify the following six 'knowledge capacities' as a firm's critical capabilities of managing internal and external knowledge in open innovation processes: inventive, absorptive, transformative, connective, innovative, and desorptive capacity. 'Knowledge management capacity' is a dynamic capability, which reconfigures and realigns the knowledge capacities. It refers to a firm's ability to successfully manage its knowledge base over time. The concept may be regarded as a framework for open innovation, as a complement to absorptive capacity, and as a move towards understanding dynamic capabilities for managing knowledge. On this basis, it contributes to explaining interfirm heterogeneity in knowledge and alliance strategies, organizational boundaries, and innovation performance. Copyright (c) Blackwell Publishing Ltd 2009.

Does incremental and radical innovation performance depend on different types of knowledge accumulation capabilities and organizational size?

“…In this vein, although internal knowledge creation capability and absorptive capability comprise the conversion of new knowledge into reliable routines and capabilities (Wang and Ahmed, 2007), it is innovation performance that tests the reality and applicability of new capabilities generated in terms of new products and processes. Although authors such as Wang and Ahmed (2007) and Lichtenthaler and Lichtenthaler (2009) used the 'innovation capability' construct to capture the manifestation of internal and external knowledge accumulation capabilities, this study considers that a manifestation is better defined in terms of outputs or performance rather than capabilities.…”

“…However, it should be recognised that as agents in constant contact with their external environment, members of a firm can create knowledge internally in the firm from external ideas or information. The contribution of both sources of knowledge to internal knowledge exploration is considered in the definition of the 'inventive capability' by Lichtenthaler and Lichtenthaler (2009). However, this internal knowledge creation derives from a latent internal need that is developed and managed within the organization.…”

“…Numerous theoretical studies have analyzed the impacts that each of these knowledge accumulation capabilities has on innovation performance (e.g., Howells et al, 2003;Lichtenthaler and Lichtenthaler, 2009;Zahra and George, 2002). Recent empirical research analyzes the influence on innovation performance of different sources of knowledge, both internal and external to the firm (e.g., Cassiman and Veugelers, 2006;Vega Jurado et al, 2008).…”

Does open innovation apply to China? Exploring the contingent role of external knowledge sources and internal absorptive capacity in Chinese large firms and SMEs

“…The validity of this measure can be linked to Cohen and Levinthal's (1990) argument that the absorptive capacity of a firm depends on the individual absorptive capacity of its members. In essence, absorptive capacity as a type of knowledge management capacity needs to be more effectively facilitated by human knowledge than tools, machines and other tangible assets of a firm's R&D department (Lichtenthaler and Lichtenthaler, 2009). …”

Revisiting absorptive capacity from a design perspective

“…However, this leaves us with a strong paradox since in case of Radical Innovation, it is particularly relevant to be able to use external knowledge (Van Den Bosch, Volberda and De Boer 1999;Benner and Tushman 2003;Lichtenthaler and Lichtenthaler 2009b), all the more so that internal knowledge has become less valuable.…”