Science

Weekly Science Selections: AI-driven Innovation & NeuroentrepreneurshipWeekly Science Selections

Jan Spruijt

Every week, this section contains newly published scientific articles in the field of innovation & entrepreneurship. This section contains the #EditorsChoice and a list of articles grouped into #MustReads, #ShouldReads and #CouldReads. Subscribe to our newsletter to receive these in your inbox.

Permutated feature importance for the top 20 predictors (Heideman et al, 2024)
  • #MustRead: Complex Problem Solving as a Source of Competitive Advantage (Veríssimo et al, 2024): The study emphasizes the increasing importance of problem-solving skills in today’s complex business environment. Solving complex problems is identified as a crucial skill that can enhance organizational success and competitiveness. Understanding the value of problem-solving and incorporating it into organizational strategy is essential for achieving sustainable competitive advantage in today’s dynamic business landscape.
  • #MustRead: Heterogeneous university funding programs and regional firm innovation: An empirical analysis of the German Excellence Initiative (Krieger, 2024) In a revealing study, researchers unveil the hidden power of university funding in driving regional innovation. Their findings reveal that targeted investment in Excellence Clusters turbocharges firms’ ability to innovate, particularly in regions with a robust cluster presence. However, the impact of Graduate Schools or University Strategies remains underwhelming. This discovery underscores the pivotal role of strategic funding in shaping the innovation landscape, sparking vital discussions on optimizing investment strategies to supercharge regional growth.
Geographical distribution Excellence Cluster funding across regions. (Krieger, 2024)
  • #MustRead: Neuroentrepreneurship: state of the art and future lines of work (Juarez-Varón, Zuluaga & Recuerda, 2024) Neuroentrepreneurship, a field at the intersection of neuroscience and entrepreneurship, has gained traction since 2009, illuminating how brain function influences business decisions. Despite a growing body of literature, a unified understanding of the field remains elusive. This paper addresses this gap by examining key themes in neuroentrepreneurship literature and refining definitions to provide clarity. Understanding the neural mechanisms behind entrepreneurial behavior offers practical insights for decision-making and opportunity recognition. By leveraging biometric techniques like EEG and GSR, entrepreneurs can gain a deeper understanding of risk perception and response. This review not only consolidates existing knowledge but also provides a framework for future research and practical applications in enhancing entrepreneurial decision-making processes.
  • #ShouldRead: Middle Managers’ Relational Dynamics in the Context of Acquisitions: Balancing Strategic Interdependence and Organizational Autonomy (Birollo, Rouleau & Wolf, 2024): Mergers and acquisitions (M&A) pose a challenge in balancing the need for strategic interdependence with the preservation of organizational autonomy. Middle managers (MMs) are identified as key players in this balancing act. Intersubjectivity refers to the mutual understanding and shared meaning that arises between individuals through interaction, enabling effective communication and collaboration. In mergers, intersubjectivity is crucial as it facilitates middle managers’ ability to navigate complex integration tasks by considering the perspectives and goals of both acquiring and acquired organizations, fostering smoother transitions and alignment of objectives. Similarly, in innovation, intersubjectivity fosters a collaborative environment where diverse perspectives and insights can converge, leading to the co-creation of novel solutions and the maximization of creative potential within teams and across organizational boundaries.Figure 2: A process model of actionable intersubjectivity as a crucial ability for balancing strategic interdependance and organizational autonomy (Birollo et al, 2024)
  • #ShouldRead: Age and entrepreneurship: Mapping the scientific coverage and future research directions (Syed et al, 2024) Research interest in understanding the relationship between age and entrepreneurship has surged in recent years, driven by the recognition of age as a significant factor influencing entrepreneurial behavior and career decisions. Various studies have explored the motivational factors shaping self-employment decisions, revealing age’s nuanced impact on entrepreneurial intentions and actions. While younger individuals may exhibit greater enthusiasm for entrepreneurship due to their ambitious nature and future income potential, older individuals leverage their extensive experience and social capital to navigate entrepreneurial ventures successfully. However, age-related preferences, influenced by factors such as cultural views and opportunity costs, also play a role in shaping entrepreneurial pursuits.
  • #ShouldRead: The Double-Edged Sword of Exemplar Similarity (Majzoubi et al, 2024) Ever wondered how your firm’s image relative to industry leaders affects investor perception? New research spills the beans! Aligning with category exemplars boosts your firm’s visibility and initial screening success. But beware: it also triggers comparisons that might not always work in your favor. The key? Understanding your industry’s landscape and positioning strategically. Dive into the study for practical insights to finesse your firm’s approach and ace those investor evaluations!
  • #CouldRead: Evaluating the impact of individual and country-level institutional factors on subjective well-being among entrepreneurs (Gashi et al, 2024): This study explores the relationship between subjective well-being (SWB) and entrepreneurship. Stimuli of well-being are: fostering political stability, reducing bureaucratic hurdles, and promoting economic prosperity to support entrepreneurial ventures and enhance overall satisfaction. The study also offers practical suggestions for entrepreneurs to improve their well-being, such as self-care, meaningful engagement, building strong support networks, prioritizing health, and finding purpose in their work.
  • #CouldRead: Financial stress and quit intention: the mediating role of entrepreneurs’ affective commitment (Kleine, Schmitt & Wisse, 2024) This paper delves into how financial stress impacts entrepreneurs’ desire to quit their businesses, focusing on the emotional connection entrepreneurs have with their ventures. The findings suggest that when entrepreneurs face financial stress, they’re more likely to consider quitting, especially when their emotional attachment to the business decreases. Essentially, the stronger the emotional bond with their venture, the more likely they are to persist through tough times. These insights can guide consultants and decision-makers to support entrepreneurs effectively. For instance, if a business has potential, efforts to boost the entrepreneur’s emotional commitment could increase motivation to overcome challenges. Conversely, if closure seems inevitable, strategies to help entrepreneurs emotionally detach from the business may prevent further losses. Overall, understanding and addressing entrepreneurs’ emotional ties to their ventures can inform practical strategies to navigate financial difficulties and plan for the future effectively.

The 3 Phases of Responsible Innovation

Jan Spruijt

Over the last few month, the phrase “Responsible Innovation” has been booming on scientific social media. It has emerged from Corporate Social Responsibility as a topic that researches the effect and consequences of innovation on the long term. This could be technological effects, antropological effects or ethical effects.

The fundament of this research topic lies in the Collingridge Dilemma:

The Collingridge dilemma is a methodological quandary in which efforts to control technology development face a double-bind problem: an information problem – impacts cannot be easily predicted until the technology is extensively developed and widely used – and a power problem – control or change is difficult when the technology has become entrenched.

The way to start innovating in order to enhance responsible innovation is three-fold:

1. Value-consciousness in design, research and development: this aspect means that design or R&D should start with a clear answer to the ‘why of innovation’. In other words: does this idea or design provide a solution to one of the grand challenges that we are facing in 5, 10 or 30 years? Values are the key to those answers.

2. Ethical Parallel Research: every step of the innovation management funnel  should be taken with the influence of ethical researchers and if possible, also researches from other parallel industries. This way, the impact that the innovation has on the long term can be easily addressed and tackeled early stage.

3. Constructive Technology Assessment: innovation teams shouldn’t be monodisciplinary, but multidisciplinary. That way, early-stage innovation (ideas) can be assessed and tested upon. Multidisciplinary teams form the basis of Open Innovation.

If you are interested in the material, take into account the following material:

Responsible Innovation: Managing the Responsible Emergence of Science and Innovation in Society

Science and innovation have the power to transform our lives and the world we live in – for better or worse – in ways that often transcend borders and generations: from the innovation of complex financial products that played such an important role in the recent financial crisis to current proposals to intentionally engineer our Earth’s climate. The promise of science and innovation brings with it ethical dilemmas and impacts which are often uncertain and unpredictable: it is often only once these have emerged that we feel able to control them. How do we undertake science and innovation responsibly under such conditions, towards not only socially acceptable, but socially desirable goals and in a way that is democratic, equitable and sustainable? Responsible innovation challenges us all to think about our responsibilities for the future, as scientists, innovators and citizens, and to act upon these.

The Importance of Responsible-Innovation and the Necessity of ‘Innovation-Care’

This study deals with responsibility as part of innovation. By nature, innovation gives birth to development for the organization and can only be at the core of any strategy within an ever-increasingly global economic context. However it also raises new questions stemming mostly from the impossibility to forecast the success of the innovations. More precisely, the questions raised by innovation also concern its consequences on society as a whole. Today, the innovator should understand his responsibility, the consequence of each innovation.

Moreover, common acceptance of the word ‘responsibility’ raises some questions about its use and how it should be understood. What does ‘responsibility’ mean? Who is responsible and for what? Through the notion of ‘care’, we aim at providing an evolution of responsible-innovation. The concept of ‘innovation-care’ is centered on people and more precisely focuses on taking care of them. The purpose of innovation-care is indeed to innovate and keep up with the level of productivity necessary to any organization while taking into account the essential interdependence between the status of the innovator and that of the citizen.

Enhancing Socially Responsible Innovation in Industry

This thesis presents a study that aims to explore to what extent corporate researchers in the field of industrial Life Science & Technology (LST) can consider social and ethical aspects of LST innovation to improve their Research and Development (R&D) practices. Innovators, particularly those working in controversial scientific and technology fields such as industrial LST, are encouraged to adopt socially responsible innovation methods. This requires that researchers, who work in such fields, consider the broader social and ethical context of their R&D activities.

The presented study explores first how corporate researchers can integrate such aspects in their daily work and how this could improve their work. Second it investigates whether such integration leads to a quantitatively assessable improvement of the quality of R&D. The results indicate that integration is possible, and leads to a measurable improvement of the quality of R&D work. In addition, researchers see a number of improvements in their R&D work, e.g. in the quality of communication and cooperation, and how to link their own work to corporate strategies and marketing. This thesis can be useful for innovators who wish to enhance socially responsible innovation practices, as it presents a tool for R&D management that allows for the operationalisation of socially responsible innovation and improved R&D performance.

First annual conference Responsible Innovation

Top 10 Best Articles on Open Innovation in 2013

Jan Spruijt

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.

  1. 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.
  2. 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.
  3. 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.
  4. 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’).
  5. 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.
  6. 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.
  7. 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.
  8. 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.
  9. 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.
  10. 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

The Golden Circle of Innovation

Jan Spruijt

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:

  • Associating
  • Questioning
  • Observing
  • Experimenting
  • Networking

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.

3 aspects in which Open Innovation companies distinguish themselves: results from science

Jan Spruijt

Recently, the Open Innovation Research Forum – part of the University of Cambridge – released a paper that shows results of a study among almost 1200 German innovation companies. The paper provides the hypothesis that several different innovation-enabling factors would generate more revenue within companies that embrace Open Innovation than within companies that don’t.

To be precise: the authors refer to Open Innovation as the use of “search openness”, i.e. the use of external ideas and developments as an influx for internal research and development. According to research findings, almost 70% of these companies indicated they absorbed external knowledge from one or more source. Because it is near-to-impossible to gather information on all these sources, the authors focused on gathering data on the influx of ideas from 5 sources: customers, suppliers, competitors, research institutions and government.

Most importantly, they defined four “moderating factors”: factors that could distinguish organization that absorb from the above-mentioned 5 sources from those that are not. Explanation of these four can be found in this table:

Factors distinguishing Open Innovation companies Characteristics used in study
Technology Leadership
  • Focus on Technology Leadership
  • Focus on Leadership in New Product Development
  • Focus on Leadership in New Process Development
  • Focus on Introduction of Entirely New Technologies
Incentive System
  • Use of Innovation Performance Indicators for Staff Assessment
  • Use of Tangible Incentives for Innovation Managers
  • Use of Intangible Incentives for Innovation Managers
  • Use of Incentives for Idea Development by Staff Members
Research Capacity
  • The ratio between firms’ R&D expenditures and their revenues.
Cross-functional Collaboration
  • Cultivation of Informal Internal Exchange Networks
  •  Joint Development of Innovation Strategies
  • Open Sharing of Innovation Ideas and Concepts
  • Reciprocal Support with Innovation Challenges

Table 1: four factors that are studied.

Study:

The authors gathered information from 1170 different organization, mainly from Germany. They are based upon a larger survey of which only a certain percentage was led to useful information regarding this study. The sample group spreaded out across several sectors:

Sample

For more information about the methodology used, please see the attached document.

Results: what factors are more present in Open Innovation organizations?

The study reveiled that 3 out of 4 hypotheses showed different results for companies that act on Open Innovation compared with companies that do not act on Open Innovation.

  1. The Incentive System: having a high Incentive Design, companies that use Open Innovation generate much more revenue from New Products.
  2. Research Capacity: having more research capacity, companies that use Open Innovation generate more revenue from New Products.
  3. Cross-Functional Collaboration: having higher cross-functional internal collaboration, companies that use Open Innovation generate more revenue from New Products.

The study also showed that Technology Leadership, although, like the rest, is generating more revenue when more present, doesn’t show significant differences between companies that use Open Innovation and those that don’t. In other words: Open Innovation companies with great system of Technology Leadership don’t necesseraly generate more revenues from new products, then Closed Innovation companies with a great system of Technology Leadership.

This figure shows the results:

Results

Download the paper:

Click here to download the full paper.

 

 

Exclusive preview: Managing Open Innovation

Exclusive preview: Managing Open Innovation

Jan Spruijt

We collaborated with Marcel Bogers, Associate Professor* at the University of Southern Denmark, to show you an exclusive preview of a lecture on “Managing Open Innovation”, that will air on Danish television later this winter. The lecture is about the “sources for innovation”: how to obtain and make use of external knowledge to commercialize ideas into innovations.

The talk focuses on Open Innovation and the role that companies and users play in the process. He addresses three steps:

  1. Obtaining
  2. Integrating
  3. Commercialization

In obtaining external knowledge for innovation, he firstly shows some examples of companies collaborating. When the talk continues, he moves towards the increasingly important role of consumers in this process, building a bridge between Open Innovation and, for instance, Co-Creation. Marcel Bogers referring to an example of the development of the internet:

“Is it something that came about because some large firm invested a lot in R&D and is now making a lot of money from it? Not really. It was Tim Berners-Lee – who was working at CERN in Geneve – who invented the internet. Did it came from large R&D investments? No, he just needed something to work more effeciently. So in fact, users are very important sources of innovation.”

His elaboration on co-creation as a substantial element of Open Innovation, is (in my opinion) one of the best parts of the lecture. Bogers gives several great examples of products that make up our daily routines and are basicaly invented by ourselves. Bogers: “Sometimes, it doesn’t come from users, but from specialists or small groups of users. And sometimes the experts and users join forces.”

He also refers to a recent study on the impact of consumers in R&D. In the UK alone there are some 3 billion people involved in innovating activities and they spend approximately £5 billion  on technological innovations. This is incomparable to the roughly 22.000 people actually working in R&D and is twice as much expenditure as corporate R&D. This leads to the hypothesis that the closed model of innovation isn’t longer valid anymore.

Watch the full lecture:

Do you have any further questions?Marcel Bogers

Bogers indicated that he will be glad to answer any questions regarding his talk: “If you are interested in
some of the references, let me know, as most of the references to the research upon which I base the talk aren’t visible in the lecture. Most of the material is coming from my own work with various collaborators, and I would be happy to share or discuss this work.” Please feel free to drop your question or remark below.

We will update this post once it has been aired on Danish Television.

*As of Febraury 1, 2012.

Teaming up on Open Innovation: art or science?

Teaming up on Open Innovation: art or science?

Jan Spruijt

Earlier this week, ABN AMRO, released a report on Open Innovation, titled “Teaming up on Open Innovation: art or science?”. Although solely released for the food sector, it explores Open Innovation theory from a new and interesting perspective. The report is authored by prof. dr. Omta (University of Wageningen), dr. Fortuin (Food Valley) and drs. Dijkman (ABN AMRO).

The core of the article consists of 5 key elements: the critical (failure) factors for Open Innovation.

What are the critical (failure) factors of Open Innovation?
  • Defining problems and setting goals: according to the authors there are three ways of overcoming this issue. First of all, do a lot of (premature) research and dare to stop when you’re on a dead end road. Secondly, create road maps. Meaning: use trends and market knowledge to look at least 5 years ahead, because that’s time it takes for a radical innovation to land. And lastly, “look different, look foward”, referring to Henry Fords quotation: “If I had asked people what they wanted, they would have said faster horses.”
  • Partner selection: try to find partners as fast as possible. Management commitment in this process is essential. Also, don’t be egocentric. Open Innovation is about contributing rather than perceiving. And lastly, there is more contracts. A succesfull collaboration is built by mutual trust and commitment.
  • Building a contract: set rules and find and define the risks that are involved in collaboration. It is easy to say that risks are inevitable, but in fact, they are not if you think about them thouroughly.
  • Executing the Open Innovation project: don’t let fear rule the process. It happens to every project that – at some time – there is some distrust or mistrust in the partnership. Invest in trust, do what it takes. Link cultures and communicate oftenly and profoundly. This also means investing in speaking each others (technical) language and managing conflicts.
  • Monitoring the project: start off by knowing how important costs are, how the project will be managed and what other preconditions are necessary during the project.

Art or Science?

Oddly, the report doesn’t give an answer to the question that is raised in the title of their work. Which gives us the opportunity to ask you: what do you think: is Open Innovation art or science?

“Innovation does not happen in a vacuum”

Jan Spruijt

Last month, Rogier van der Heide, Chief Design Officer of Philips Lighting, spoke at TEDxAmsterdam about Open Innovation. He explained a few beaatiful examples of collaboration in the design phase to maximize possible outcomes. An impressive 7-minute speech, in which he – instead of using the normal powerpoint sheets – touched the audience by showing video’s, playing with light effects, got ‘Fergie’ of the Black Eyed Peace on the stage and made an old Rembrandt litteraly alive. More information on his speech: here.

On the Philips website he adds: “In order to get to innovations, it is essential to collaborate well and to share knowledge. Innovating is not something you do alone, it works like a ‘pressure cooker’, in which the innovation of LED technology is being accelarated in the application for – for instance – the illumination of art and buildings.”

He rounds off his speech with the following quote:

“Innovation doesn’t happen in a vacuum. You’re never alone. No one has the key just by himself.”