Openness in Product and Process Innovation

Abstract

Open innovation has generally been seen as an important driver of improved efficiency and effectiveness in product and/or service innovation. This chapter extends these focal areas to include process innovations -generally organizational innovations aimed at improving the nature of organizational value adding and factor transformative systems. In this study we assess the impact of openness on products, services and processes, drawing on a large-scale sample of Australian firms. We find that open innovation models are useful for firms seeking to innovate in processes, as well as products and services. However, we find that openness to external information sources may, after a time, lead to decreasing marginal returns as measured by innovation performance. We also observe that, within our sample, the proposed complementarities between internal and external knowledge sources are generally only evident as precursors to the introduction of new products and services, and may not be as beneficial in stimulating process innovations. We also show that investment in absorptive capacity has a declining marginal effect on the innovation performance of new processes, but not on the introduction of new products and services.

Open innovation in the food and beverage industry

“…Therefore, in line with other studies (Laursen and Salter, 2006;Sofka and Grimpe, 2010;Huang and Rice, 2012;Berchicci, 2013) we argue that firms need to have the correct amount of absorptive capacity in order to reap returns for their OI strategy.…”

“…Since external R&D is generally used in a more selective and partial fashion, Huang and Rice (2012) hold that it has a weaker impact on innovation performance than the other two OI dimensions.…”

External knowledge search, absorptive capacity and radical innovation in high-technology firms

“…Although previous studies have connected AC and OI (e.g. Clausen, 2013;Escribano et al, 2009;Huang & Rice, 2012;Rothaermel & Alexandre, 2009), examination of the two components of AC in the context of various types of OI has been scarce (Kim et al, 2016). The fact that we have differentiated between the abilities to identify and assimilate external knowledge from the abilities to transform and exploit it, give a better understanding of how managers can modulate their efforts to leverage the impact of external knowledge on a firm's radical innovation.…”

Foreign direct investment in R&D and domestic entrepreneurship in China’s manufacturing industries

“…For example, Colantone et al (2010) argue that opening of international trade leads to increased competitive pressure on domestic firms, which contributes to exit of some domestic firms. 10 Other related studies include Almeida and Phene (2004), Huang and Rice (2012), and Sun (2013, 2014).…”