The impact of outside‐in open innovation on innovation performance

Abstract

PurposeThe purpose of this paper is to examine the influence of an open outside‐in innovation management strategy on companies' innovativeness and innovation performance. Specifically, it focuses on the adoption of the open innovation paradigm in practice and the extent of collaboration with different stakeholders.Design/methodology/approachThe proposed hypotheses are tested empirically using survey data collected from stock‐listed companies in Germany, Switzerland and Austria. The data include the complete responses from 141 R&D managers for the period from 2004 to 2008.FindingsThe openness of the outside‐in process in R&D management is of crucial importance for achieving high direct and indirect innovation output effects. In particular, openness towards customers, suppliers and universities has a significant positive impact on the different innovation performance measures. Regarding openness towards cross‐sector companies, the analysis reveals a significant negative effect on innovation performance.Research limitations/implicationsThe utilization of cross‐sectional data and its dependency on the perceptions and experiences of the respondents has its limitations. Thus, future research should be based on a more longitudinal design that emphasizes quantitative measurement techniques.Originality/valueTo date, the adoption of open innovation in practice has not been examined in depth. This study provides empirical insights into the open innovation approaches in German‐speaking countries and, by drawing important conclusions for managers involved in the R&D processes, fills a gap in the innovation management literature.

Alliances, Open Innovation and Outside-in Management

“…At the same time, every firm needs to pay attention and maintain good relationships with partners to enhance its own competitive ability. The partners within the supply chain are one of the most important sources of knowledge applied to develop innovative processes and the combination of the company know-how with these of suppliers, customers and external actors can increase the firm's innovativeness (Inauen, Schenker-Wicki 2011).…”

The Relation between Different Open Innovation Practices and Firm’s Innovation Performance

“…Customer involvement was in prior research shown to positively relate to a firm's innovation performance (Inauen and Schenker-Wicki 2011). This positive association emerged from customers' expressing their needs, which can be a great source of innovative ideas for new products and services and for continuously improving existing ones (Chesbrough 2003).…”

“…For example, Laursen and Salter's (2006) findings based on the uk innovation survey suggested a curvilinear relationship between external search breadth and external search depth and innovation performance. In another study on a sample of 141 companies from three countries, Inauen and Schenker-Wicki (2011) showed that openness of the outside-in process positively relates to a firm's innovation performance; in particular, collaboration with customers and universities positively relates to product innovations, while openness towards suppliers, competitors, and universities is linked to process innovations. However, only a few studies have considered the multidimensionality of a firm's open innovation process.…”

Untitled

“…This approach facilitates the gain and exploitation of innovative opportunities available to them, which positively relates to the firm's innovation performance (Laursen and Salter 2006). The overall positive effect of external networks on innovation has been also shown by Inauen and Schenker-Wicki (2011). Among resources in the networks, creativity, fresh ideas on product innovation, and know-how to implement such innovations (Schroll and Mild 2011) significantly contribute to market push innovations (Nijhof, Krabbendam, and Looise 2002).…”

“…For example, Laursen and Salter's (2006) findings based on the uk innovation survey suggested a curvilinear relationship between external search breadth and external search depth and innovation performance. In another study on a sample of 141 companies from three countries, Inauen and Schenker-Wicki (2011) showed that openness of the outside-in process positively relates to a firm's innovation performance; in particular, collaboration with customers and universities positively relates to product innovations, while openness towards suppliers, competitors, and universities is linked to process innovations. Existing research provides overall support for the argument that there is a relationship between inbound and outbound open innovation activities and innovation performance (Chesbrough and Crowther 2006;Chesbrough 2003).…”