Top 10 Best Articles on Open Innovation in 2013
Based on the rankings of the SSRN database, we are able to create a ranking of the best – most downloaded – Open Innovation and related topics articles that have been published in 2013 so far. Therefore, this is a list of brand new theories, recent case studies, preliminary results and pioneering research.
- The Theory of Crowd Capital; Prpic, J., & Shukla, P.
Abstract: We are seeing more and more organizations undertaking activities to engage dispersed populations through Information Systems (IS). Using the knowledge-based view of the organization, this work conceptualizes a theory of Crowd Capital to explain this phenomenon. Crowd Capital is a heterogeneous knowledge resource generated by an organization, through its use of Crowd Capability, which is defined by the structure, content, and process by which an organization engages with the dispersed knowledge of individuals – the Crowd. Our work draws upon a diverse literature and builds upon numerous examples of practitioner implementations to support our theorizing. We present a model of Crowd Capital generation in organizations and discuss the implications of Crowd Capital on organizational boundary and on IS research.
- Leveraging External Sources of Innovation: A Review of Research on Open Innovation, West, J. & Bogers, M.
Abstract: This article reviews research on open innovation that considers how and why firms commercialize external sources of innovations. It examines both the “outside-in” and “coupled” modes of Enkel et al. (2009). From an analysis of prior research on how firms leverage external sources of innovation, it suggests a four-phase model in which a linear process — (1) obtaining, (2) integrating and (3) commercializing external innovations — is combined with (4) interaction between the firm and its collaborators. This model is used to classify papers taken from the top 25 innovation journals identified by Linton and Thongpapan (2004), complemented by highly cited work beyond those journals. A review of 291 open innovation-related publications from these sources shows that the majority of these articles indeed address elements of this inbound open innovation process model. Specifically, it finds that researchers have front-loaded their examination of the leveraging process, with an emphasis on obtaining innovations from external sources. However, there is a relative dearth of research related to integrating and commercializing these innovations.
Research on obtaining innovations includes searching, enabling, filtering, and acquiring — each category with its own specific set of mechanisms and conditions. Integrating innovations has been mostly studied from an absorptive capacity perspective, with less attention given to the impact of competencies and culture (including not-invented-here). Commercializing innovations puts the most emphasis on how external innovations create value rather than how firms capture value from those innovations. Finally, the interaction phase considers both feedback for the linear process and reciprocal innovation processes such as co-creation, network collaboration and community innovation.
This review and synthesis suggests several gaps in prior research. One is a tendency to ignore the importance of business models, despite their central role in distinguishing open innovation from earlier research on inter-organizational collaboration in innovation. Another gap is a tendency in open innovation to use “innovation” in a way inconsistent with earlier definitions in innovation management. The article concludes with recommendations for future research that include examining the end-to-end innovation commercialization process, and studying the moderators and limits of leveraging external sources of innovation.
- The Golden Circle of Innovation: What Companies Can Learn from NGOs When It Comes to Innovation, Spruijt, J.P., Spanjaard, T.G.S. & Demouge, K.
Abstract: This paper examines the lessons that companies can learn from NGOs when it comes to the why, the how and the what of innovation. It explains innovation from the inside out: why is it important and what are the grand challenges? Followed by the how: in what way can innovation be managed and how does the innovation process look like in a modern economy?
This introduction is elaborated on with two case studies within NGOs in The Netherlands, Fair2 and Liliane Foundation. It leads to several conclusions and hypotheses for further research.
- Sustainability-Oriented Innovation, Hansen, E.G. & Grosse-Dunker, F.
Abstract: Sustainability-oriented innovation (SOI): the commercial introduction of a new (or improved) product (service), product-service system, or pure service which – based on a traceable (qualitative or quantitative) comparative analysis – leads to environmental and (or) social benefits over the prior version’s physical life-cycle (‘from cradle to grave’).
- Open Innovation and Organization Design, Tushman, M., Lakhani, K. & Lifshitz-Assaf, L.
Abstract: Abernathy’s (1978) empirical work on the automotive industry investigated relationships among an organization’s boundary (all manufacturing plants), its organizational design (fluid vs. specific), and its ability to execute product and/or process innovations. Abernathy’s ideas of dominant designs and the locus of innovation have been central to scholars of innovation, R&D, and strategic management. Similarly, building on March and Simon’s (1958) concept of organizations as decision making systems, Woodward (1965), Burns and Stalker (1966), and Lawrence and Lorsch (1967) examined relationships among organizational boundaries, organization structure, and innovation in a set of industries that varied by technology and environmental uncertainty. These and other early empirical works have led a diverse group of scholars to develop theories about firm boundaries, organization design, and the ability to innovate.
- Managing Crowd Innovation in Public Administration, Collm, A. & Schedler, K.
Abstract: Governments all over the world have discovered the world of social media, for better or for worse. Whereas some of them are making every effort to prevent the unhierarchical and therefore uncontrollable (dissident) opinion-forming process in Web 2.0, others are looking for ways of putting the potentialities of this new opening-up of communication to use. One approach that is increasingly being tried out is opening up innovation processes in government. However, this opening-up of innovation processes is anything but trivial. It requires a thoroughly thought-out strategy and thus confronts government systems with extensive challenges if it is not to suffer the same fate as other unsuccessful attempts at reform in the past. In our essay, we reflect on the consequences of these challenges for public managers.
- Adopting Open Innovation to Stimulate Frugal Innovation and Reverse Innovation, Hossain, M.
Abstract: Frugal innovation and reverse innovation have very recently emerged as interesting concepts. Frugal innovation is based on cost constraints to serve low-income customers in developing countries. When frugal innovation comes to developed countries and becomes commercially successful it is considered as reverse innovation. Recently, many companies, such as GE, Siemens, Procter and Gamble, etc. have engaged heavily in frugal innovation and in reverse innovation. Open innovation, on the other hand, has not been considered in the context of low-income customers in developing countries. We argue that using open innovation concept in developing countries may boast frugal innovation and reverse innovation. Consequently, quality product with low-income will be widely available not only in developing countries but also in developed countries. Hence, western companies need to change their long hold business strategies and reshape their business models. This study aims to illustrate why western companies need to be aware of and take step to become successful in the turbulent business world.
- The Impact of Visibility in Innovation Tournaments: Evidence from Field Experiments, Wooten, J.O. & Ulrich, K.T.
Abstract: Contests have a long history of driving innovation, and web-based information technology has opened up new possibilities for managing tournaments. One such possibility is the visibility of entries – some web-based platforms now allow participants to observe others’ submissions while the contest is live. Seeing other entries could broaden or limit idea exploration, redirect or anchor searches, or inspire or stifle creativity. Using a unique data set from a series of field experiments, we examine whether entry visibility helps or hurts innovation contest outcomes. Our eight contests resulted in 665 contest entries for which we have 11,380 quality ratings. Based on analysis of this data set, we provide evidence that entry visibility influences the outcome of tournaments via two pathways: (1) changing the likelihood of entry from an agent and (2) shifting the quality characteristics of entries. For the first, we show that entry visibility generates more entries by increasing the number of participants. For the second, we find the effect of entry visibility depends on the setting. Seeing other entries results in more similar submissions early in a contest. For single-entry participants, entry quality “ratchets up” with the best entry submitted by other contestants previously if that entry is visible, while moving in the opposite direction if it’s not. However, for participants who submit more than once, those with better prior submissions improve more when they can not see the work of others. The variance in quality of entries also increases when entries are not visible, usually a desirable property of tournament submissions.
- Digital Scholarship: Exploration of Strategies and Skills for Knowledge Creation and Dissemination, Cobo, C. & Naval, C.
Abstract: Widespread access to digital technologies has enabled digital scholars to access, create, share, and disseminate academic contents in innovative and diversified ways. Today academic teams in different places can collaborate in virtual environments by conducting scholarly work on the Internet. Two relevant dimensions that have been deeply affected by the emergence of digital scholarship are new facets of knowledge generation (wikis, e-science, online education, distributed R&D, open innovation, open science, peer-based production, online encyclopedias, user generated content) and new models of knowledge circulation and distribution (e-journals, open repositories, open licenses, academic podcasting initiatives, etc.). Despite the potential transformation of these novel practices and mechanisms of knowledge production and distribution, some authors suggest that digital scholarship can only be of significance if it marks a radical break in scholarship practices brought about through the possibilities enabled in new technologies. This paper address some of the key challenges and raise a set of recommendations to foster the development of key skills, new models of collaboration and cross-disciplinary cooperation between digital scholars.
- Dissenting State Patent Regimes, Hrdy, C.A.
Abstract: Inventors who believe in open innovation should start applying for state patents instead of U.S. patents. Patenting at the state level prevents rivals from obtaining U.S. patents and generates valuable innovation spillovers in other states where the patent has no legal effect. It also creates a unique opportunity to force patent law reform from the bottom up. In exchange for filing fees, inventors can demand patents based on rules that support open innovation, like shorter terms in fast-moving industries, stricter disclosure requirements, or new restrictions on patenting by non-practicing entities. The lobbyists who stymie reform at the national level will have a much harder time blocking reform in all fifty states. Meanwhile, patent law’s dissenters need only one state to start granting patents in order to get courts, the media, and eventually Congress to pay attention.
The Golden Circle of Innovation
Recently, a new article about the “The Golden Circle of Innovation” has been published in the SSRN. It provides an interesting way of combining Simon Sinek’s Golden Circle and some traditional literature on innovation science into the ‘Golden Circle of Innovation’.
Important notice: the full article can be downloaded freely from the SSRN database: The Golden Circle of Innovation: what companies can learn from NGOs when it comes to innovation.
Sinek’s Golden Circle
In his work he explains why everything starts with answering the why-question. And that also means innovation, as he states it: “Knowing your why is not the only way to be successful, but it is the only way to maintain a lasting success and have a greater blend of innovation and flexibility. When a why goes fuzzy, it becomes much more difficult to maintain growth, loyalty and inspiration that helped drive the original success” (Sinek, 2009).
Literature review of Innovation Science
Though not focusing on the why, how and what, Crossan and Apaydin have generated an overview of all relevant theories on innovation, resulting in a framework for innovation, as depicted below.
They mention two ‘dimensions of innovation’, both focusing on innovation itself and they mention several ‘determinants of innovation’, focusing on the way that innovation is accelerated and managed within organizations.
Golden Circle of Innovation
In attempt to combine both models with each other, we created a new framework: the golden circle for innovation.
The why of innovation: grand challenges, trends and mission statements
The why of innovation not only consists of leadership aspects; it also consists of embracing a mission that fulfills a more general need and therefore rectifies the necessity of innovation.
As Einstein once stated “If you always do what you always did, you will always get what you always got”, change is a prime economic driver. “It is practically impossible to do things identically” (Hansen & Wakonen, 1997) which “makes any change an innovation per definition” (Crossan & Apaydin, 2009).
But to what extend? Innovation drives economic growth and economic growth is a necessity because of the grand challenges that this world is facing, such as keeping up with international competition in a globalizing world – which in turn increases the need for higher productivity rates through both product innovation and process innovation (Parisi, Schiantarelli, & Sembenelli, 2006) – and megatrends such as climate change, social problems and the experience economy (Brainport, 2007; Sistermans, Maas, & Soete, 2005).
So how are great leaders capable of embracing this necessity for innovation and embed it into their vision for the company? Dyer, Christensen and Gregerson (Dyer, Gregersen, & Christensen, 2009) undertook “a six-year study into the origins of creative – and often disruptive – business strategies in innovative companies”. They found evidence that these leaders are visionary and much more facilitating the innovation process than actually coming up with innovations themselves. They are drivers of the process. Their study results in five ‘discovery skills’ that these inspirational leaders do 50% better than their non-creative counterparts:
Concluding this paragraph, we can state that an effective answer the why of innovation consists of both a motivational mission statement that embraces one or more grand challenges that is functioning as the beating heart of the organization and inspirational leaders that are effective in the five before-mentioned discovery skills.
The how of innovation: innovation history, management and processes
Innovation has a basis in the product life cycle. Literature on this topic goes back centuries, but was first scientifically mentioned by Levitt (Levitt, 1965). In several revising studies, Perreault has elaborated on this model (Perreault, McCarthy, Parkinson, & Stewart, 2000). The model consists of the four phases a product or service are subject to: market introduction, market growth, market stability and decline. From an innovation perspective, Rogers has created a model that characterized final consumers to the extend in which they adopt to new technologies: The Diffusion of Innovation and Adopter Categories (Rogers, 2002).
In recent decades, a lot of research has been performed into innovation processes and the steps that regularly seem to reoccur in these processes. Literature reviews show there is little consensus about the number of phases and types of phases that should be part of a regular innovation cycle (Adams, Bessant, & Phelps, 2006; Gopalakrishnan & Damanpour, 1997).
De Brentani and Reid further elaborate on this model (Reid & De Brentani, 2004). They state that incremental, structured innovations are mostly the result of explicit and structured innovation processes and organizational processes. On the other hand, unstructured innovation processes (especially in the first one or two phases) often lead to disruptive or radical innovations. This is also called the ‘fuzzy front end’ of innovation (Brentani & Reid, 2012). Structure and organisation in later phases of innovation processes is always a pro for the success rate of innovation. In what way does the fuzzy front end of innovation differ with structured innovation?
- There is continuous unstructured problem identification and unstructured opportunity recognition, whereas more structured innovation processes mostly use problem structuring and opportunity structuring and the early phases of the process (Hauser, Urban, & Weinberg, 1993; Leifer, O’Connor, & Rice, 2001).
- Information collection and information exploration is generally outside-in oriented, whereas these steps are often inside-out oriented in structured processes.
This theory is further elaborated on by Mance, Murdock and Puccio, who have generated the following model (Puccio, Mance, & Murdock, 2010).
At this point, we have tried to deduce a model that comprises all before-mentioned models and consequently consists of four phases that each have the form of diverging-converging, but also as a total has to form of diverging-converging.
Similar like organizations growth models, the area of innovation management has been undergoing several improvements over the years. Rothwell has stated that market changes have contributed to these improvements and he distinguishes five different generations of innovation:
- 1st generation: technology push
- 2nd generation: market pull
- 3rd generation: coupled innovation
- 4th generation: integrated innovation
- 5th generation: open innovation
Concluding this paragraph, we can state that as part of the how of innovation the processes should be oriented at following a pragmatic approach – such as problem finding, ideation, concepting and implementation – and should consist of both a structured inside-out approach and a more chaotic outside-in approach and that the management should be oriented at successful implementation and embedding new approaches to innovation management, such as open innovation.
The what of innovation: innovation as a process and as an outcome
There are various definitions of innovation. In an earlier article, we have used the following, fairly narrow defined, definition of Schilling: “Innovation is the act of introducing a new device, method or material for application to commercial or practical objectives” (M.A. Schilling, 2005; Spruijt, 2012). Crossan & Apaydin recently published a literature review on innovation literature, stating: “An unrestricted search of academic publications using the keyword innovation produces tens of thousands of articles, yet reviews and meta-analyses are rare and narrowly focused, either around the level of analysis (individual, group, firm, industry, consumer group, region, and nation) or the type of innovation (product, process, and business model)” (Crossan & Apaydin, 2009). To be specific, a current search on the keyword “innovation” results in 2.5 million articles on Google Scholar and thousands of articles using the keyword combination “definition of innovation”. Clearly, there isn’t a specific definition that is correct and many perspectives should be taken into account when defining innovation.
Crossan and Apaydin (2009) have identified different forms of innovation and grouped them around certain dimensions, some of them related to innovation as a process, some of them to innovation as an outcome. These dimensions are:
Innovation as a process:
- drivers of innovation
- levels of innovation
- direction of innovation
- source of innovation
- locus of innovation
Innovation as an outcome:
- forms of innovation
- magnitude of innovation
- referent of innovation
- type of innovation
Golden Circle of Innovation
This leads to a more detailed model of the one we presented earlier:
Example case of NGOs
During the studies we followed the Liliane Foundation in an innovation project aiming to create more awareness amongst high school students about the problems in third world countries. They collaborated with a group of students from Avans University in order to identify the problems. These students are high school dropouts and were able to address the problem very efficiently. In a next step, the Liliane Foundation gathered a group of high school teachers to further develop ideas and alternative programs for awareness. In a third step, they collaborated with high school executives and university executives in order to create a platform for the implementation of the alternative programs and to find financial contribution. In the last phase, the implementation, they collaborated with all parties and included some external partners, mostly sponsors, in the roll out. The whole project was successfully launched within a year.
So what did they do? They used their why to find partners that were willing to help them executing the how. They found a way of ‘open innovation’ that is rarely seen in the corporate world, as depicted in the following figure.
Important notice: the full article can be downloaded freely from the SSRN database: The Golden Circle of Innovation: what companies can learn from NGOs when it comes to innovation.
Gap between Innovation Leaders and Innovation Followers in European Union grows
The results of the 2013 study of innovation in the European Union have been published. The most innovative countries are still Germany, Finland, Sweden and Denmark. However, the gap between these so-called ‘innovation leaders’ and the innovation followers, such as the Netherlands and Luxembourg is growing.
Or, as stated by the European Commission:
Innovation performance in the EU has improved year on year in spite of the continuing economic crisis, but the innovation divide between Member States is widening. While the most innovative countries have further improved their performance, others have shown a lack of progress. The overall ranking within the EU remains relatively stable, with Sweden at the top, followed by Germany, Denmark and Finland. Estonia, Lithuania and Latvia are the countries that have most improved since last year. Drivers of innovation growth in the EU include SMEs and the commercialisation of innovations, together with excellent research systems. However the fall in business and venture capital investment over the years 2008-2012 has negatively influenced innovation performance.
Read the full report: