The role of prior experience, intellectual property protection and communication on trust and performance in innovation alliances

Abstract

An important concept in innovation literature is open innovation, where firms may use knowledge of other companies to develop new products or processes. However, there is a tension between the desire to be open, to profit from the knowledge of others, and the desire to be closed to prevent others from making use of the firms own profitable knowledge. Formal and non-formal intellectual property (IP) protection mechanisms may protect the company in an innovation alliance, but are often costly and may hinder flexibility and creativity. In the present paper the role of formal and non-formal IP protection arrangements and communication on the building and maintenance of trust and ultimately on performance has been investigated. A survey questionnaire was combined with semi-structured interviews of CEOs and R&D managers of seven companies and two commercial research organizations in the seed sector, one agrifood company, one commercial research organization in the agrifood and one commercial research organization in the high-tech sector. Thirty-three innovation alliances were investigated in total. It was found that for companies active in an innovation alliance it is important to understand how prior experiences, IP protection and communication influence the level of trust in an alliance, and that the level of trust is positively related to innovation performance. Recommendations are given for open innovation managers how to make optimal use of the innovation potential of the alliance partner(s), by fostering communication within the alliance and by using formal IP protection arrangements as a platform to create trust within the alliance.

SMEs' Preference for Innovation Networks: A Choice Experimental Approach

“…This is consistent with the expectation that the focus of the firm on process or market innovations also leads to different needs in terms of networking and information. Openness is more useful when attention is driven by market innovation (Johne, ), while process innovation is more often associated with confidentiality requirements (Ruitenburg, Fortuin & Omta, ). Interestingly, no significant interaction effect was found between product innovation and level of information sharing, suggesting that the appropriation concerns of firms with a high level of product innovations are lower than expected.…”

“…One possible explanation for this lack of support is that SMEs actually rely on other mechanisms than confidentiality to protect their product assets. It is suggested that speed of gaining market share is often regarded as the most effective way to protect product innovations (Ruitenburg, Fortuin & Omta, ). Finally, our results also show that the higher the number of market innovations, the higher is the probability of choosing the network aiming at managing the firms' network of partners for innovation.…”

“…For food SMEs with a high level of product or process innovations, we believe that the danger is high that their firmspecific inputs (i.e., product or process innovations) will be exploited by other firms when disclosed. Indeed, product innovations, such as new recipes, cannot be protected by formal mechanisms (Ruitenburg, Fortuin & Omta, 2014). This is also applicable for process innovations as they are mainly derived from new technologies developed by upstream industries (Capitanio, Coppola & Pascucci, 2010;Ettlie & Reza, 1992).…”

Open Innovation in Agrifood Chain: A Systematic Review

“…Therefore, surveys (Dries, Pascucci, Torok & Toth, 2014;Pellegrini et al, 2014) and interviews with managers (Beckeman, Bourlakis & Olsson, 2013;Ruitenburg, Fortuin & Omta, 2014) were conducted, but a significant part was based on single or multiple case studies (Hergenröther & Siemes, 2010;Remon, 2011;Thornblad & Hedner, 2012;Klerkx & Nettle, 2013).…”

“…Similarly, mechanisms of protection of intellectual property, be they formal or informal, can protect organizations, although generally they are expensive or limit flexibility and creativity (Ruitenburg et al, 2014).…”