Inbound and Outbound Open Innovation: Organization and Performances

Abstract

The aim of the paper is to analyse the relationships between the openness degree of companies and their 1) context features, 2) R&D organization and 3) financial performances. The openness degree is defined after a pecuniary approach, involving all the transactions in the innovation market. Hypotheses are formulated and, then, tested on a sample of 126 world top R&D spending bio-pharmaceutical companies for the period 2008-2012. Open innovation is more pervasive among small and young companies, for most of which it represents the very core business. Inbound and outbound practices have a similar diffusion in terms of number of companies adopting them, but the cumulative values of inbound flows are higher, whereas outbound flows are more relevant when compared to the total business of the firms. Inbound practices are substitutive to internal R&D activities, while outbound ones are complementary to internal development. The performances of companies have an inverted-U shape trend versus inbound practices and a fundamentally decreasing trend versus outbound ones.

The influence of open innovation practices on business performance in Mexican family and non-family SMEs

“…Specifically, a distinction can be made between the two directions of outbound and inbound open innovation (Lichtenthaler & Ernst, 2006;Spithoven et al, 2010;Mazzola et al, 2012;Michelino et al, 2014;Scuotto et al, 2017). The former explains the external sharing of technology in open function methods, involving the transfer of knowledge to the external environment (Lichtenthaler, 2009).…”

“…Obtaining information on the company's external environment can occur through different business partners, customers, competitors and suppliers (Lichtenthaler, 2015;Santoro, Ferraris, Giacosa, & Giovando, 2016). Moreover, inbound practices certainly produce a positive influence on the firm's performance, since they incorporate and develop important concepts, procedures or technologies from outside which can be added to local innovation (Wang & Zhou, 2010;Michelino et al, 2014).…”

“…Undoubtedly companies nowadays are becoming more conscious of their inability e to fully compete with others using only internally developed ideas. As a result, there is a stronger trend towards collaboration, including the development and adaptation of processes through sharing collaborative activities (Michelino, Caputo, Cammarano, & Lamberti, 2014;Tobiassen & Pettersen, 2018). Therefore, open innovation is seen as a new scenario where companies must leave their comfort zones and open themselves up to external professionals combining internal and external knowledge.…”

Affiliated participation in open source communities

“…It should be determined by the strategic, organizational, and managerial contexts of the firm, and the benefits and costs must be evaluated. In such case it would be able to not only generate cost, but also the appropriate profit [42].…”

Investments and Divestments of Intangibles in an Open Innovation Context

“…Consistently, the transactions featuring these companies can be detected in the income statement, as components of the EBIT. Typically, bio-pharmaceutical firms enter into several kinds of agreements with universities, medical and research centres and other bio-pharmaceutical companies, and work with many providers in pre-clinical and clinical development, thus resulting in external development costs related to clinical trials; in particular, small and young BIO companies provide R&D services to larger and longer established PH firms, the former more oriented to outbound practices, the latter to inbound ones (Michelino et al, 2014b). Such findings are consistent with literature, signalling the creation of a tight inter-firm network of R&D collaboration as an unavoidable strategy for innovative biopharmaceutical companies (Roijakkers and Hagedoorn, 2006;Salman and Saives, 2005).…”