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Exploring the effectiveness and efficiency of open innovation: Motivation and processes of knowledge reuse and knowledge creation across organizations

English title Exploring the effectiveness and efficiency of open innovation: Motivation and processes of knowledge reuse and knowledge creation across organizations
Applicant von Krogh Georg
Number 125513
Funding scheme Project funding (Div. I-III)
Research institution Departement Management, Technologie und Ökonomie D-MTEC ETH Zürich
Institution of higher education ETH Zurich - ETHZ
Main discipline Science of management
Start/End 01.09.2009 - 31.08.2012
Approved amount 266'872.00
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Keywords (8)

Open Innovation; Motivation; Knowledge reuse; Knowledge co-creation; Open Source software; Social practice; innovation; knowledge creation

Lay Summary (English)

Lead
Lay summary
Research on the effectiveness and efficiency of open innovation processes aims at understanding theorganizational and managerial conditions for and implications of creating sustainable open innovation. Since its introduction by Henry Chesbrough (2003), the concept of open innovation has attracted considerable attention. Whilethe academic literature on this topic has mostly focused on the utilization of readily available externalknowledge, we argue it has so far neglected how that knowledge was originally created. The understanding ofopen innovation is incomplete in terms of the processes that enable knowledge reuse and knowledge co- creation, in particular regarding their effectiveness and efficiency. Our proposed research agenda seeks to explore the effectiveness and efficiency of open innovation processes because the current open innovation literature promises gains and additional sources ofincome unavailable to closed innovation, taking place within one organization. We pose two main research questions: (1) what motivations serve as antecedents to, and are supported by open innovation processes; (2) how and why are these open innovation processes effective and efficient?We propose three research streams as part of our agenda: Motivation, Knowledge Reuse, and Knowledge Co-creation.The motivation and continued contributions of outside agents appear to be a key factor for the effectiveness of open innovation projects. We believe that OSS developers view their participation in communities as a social practice they feel attached to. Understanding, facilitating, and shaping the social practice is, thus, critical to enable long-term contributions to OSS projects and potentially to projects outside the OSS community as well.Research on Knowledge Reuse deals with the efficient reuse of existing kno wledge across knowledge domains. We argue that reuse can make open innovation projects more effective (by bringing in ideas across knowledge domains that an organization does not usually have access to) as well as more efficient.Knowledge Co-creation, finally, deals with the creation of new knowledge that suits the focal firms' open innovation projects. We will investigate how a firm can identify opportunities, search partners, and facilitate knowledge co-creation through a set up of appropriate organizational structures and enabling contexts; how a firm can keep control of what is being created while receding control to an open innovation project; and under what conditions competitors will join and co-create knowledge.
Direct link to Lay Summary Last update: 21.02.2013

Responsible applicant and co-applicants

Employees

Publications

Publication
How do firms develop capabilities for scientific disclosure?
Simeth M, Lhuillery S (2015), How do firms develop capabilities for scientific disclosure?, in Research Policy, 44(7), 1283-1295.
What makes companies pursue an Open Science strategy
Simeth M, Raffo D (2013), What makes companies pursue an Open Science strategy, in Research Policy, 42(9), 1513-1543.
Exploring social preferences in private-collective innovation
Garriga H, Aksuyek E, Hacklin F, von Krogh G (2012), Exploring social preferences in private-collective innovation, in TECHNOLOGY ANALYSIS & STRATEGIC MANAGEMENT, 24(2), 113-127.
Phenomenon-based Research in Management and Organisation Science: When is it Rigorous and Does it Matter?
von Krogh G, Rossi-Lamastra C, Haefliger S (2012), Phenomenon-based Research in Management and Organisation Science: When is it Rigorous and Does it Matter?, in LONG RANGE PLANNING, 45(4), 277-298.
The Comingled Code: Open Source and Economic Development
von Krogh G (2012), The Comingled Code: Open Source and Economic Development, in JOURNAL OF ECONOMIC LITERATURE, 50(1), 204-207.
Carrots and Rainbows: Motivation and Social Practice in Open Source Software Development
von Krogh Georg, Haefliger Stefan, Spaeth Sebastian, Wallin Martin W. (2011), Carrots and Rainbows: Motivation and Social Practice in Open Source Software Development, in MIS Quarterly, 36(2), 649-676.
Is open innovation a field of study or a communication barrier to theory development? A commentary
von Krogh G (2011), Is open innovation a field of study or a communication barrier to theory development? A commentary, in TECHNOVATION, 31(7), 286-286.
Open Source Software Development: Communities Impact on Public Good
Garriga Helena, Spaeth Sebastian, von Krogh Georg F. (2011), Open Source Software Development: Communities Impact on Public Good, in Lecture Notes in Computer Science, Washington, DC.Springer, Heidelberg.
Social Software and Strategy
Haefliger S, Monteiro E, Foray D, von Krogh G (2011), Social Software and Strategy, in LONG RANGE PLANNING, 44(5-6), 297-316.
Initiating private-collective innovation: The fragility of knowledge sharing
Gachter S, von Krogh G, Haefliger S (2010), Initiating private-collective innovation: The fragility of knowledge sharing, in RESEARCH POLICY, 39(7), 893-906.
Opening up design science: The challenge of designing for reuse and joint development
von Krogh G, Haefliger S (2010), Opening up design science: The challenge of designing for reuse and joint development, in JOURNAL OF STRATEGIC INFORMATION SYSTEMS, 19(4), 232-241.
Organizing for Open Innovation: Focus on the Integration of Knowledge
Wallin MW, von Krogh G (2010), Organizing for Open Innovation: Focus on the Integration of Knowledge, in ORGANIZATIONAL DYNAMICS, 39(2), 145-154.
Under the radar: Industry entry by user entrepreneurs
Haefliger S, Jager P, von Krogh G (2010), Under the radar: Industry entry by user entrepreneurs, in RESEARCH POLICY, 39(9), 1198-1213.
How constraints and knowledge impact open innovation
Garriga H., von Krogh G., Spaeth S., How constraints and knowledge impact open innovation, in Strategic Management Journal.

Collaboration

Group / person Country
Types of collaboration
EPFL Lausanne Switzerland (Europe)
- in-depth/constructive exchanges on approaches, methods or results
KOF Konjunkturforschungsstelle ETH Switzerland (Europe)
- in-depth/constructive exchanges on approaches, methods or results
- Research Infrastructure

Scientific events

Active participation

Title Type of contribution Title of article or contribution Date Place Persons involved
Academy of Management Annual Meeting 2013 Talk given at a conference How do firms develop capabilities for scientific disclosure 09.08.2013 Orlando, United States of America Simeth Markus;
DRUID Conference Copenhagen 2012 Talk given at a conference How do firms develop capabilities for scientific disclosure 19.06.2012 Copenhagen, Denmark Simeth Markus;
Strategic Management Society 2011 Annual International Conference Talk given at a conference Striking balance: Understanding firm and user participation in Collaborative Open Innovation 07.11.2011 Miami, FL, United States of America von Krogh Georg; Garriga Rubio Helena; Spaeth Sebastian;
Academy of Management Annual Meeting 2011 Talk given at a conference What makes companies pursue an Open Science Strategy 01.07.2011 San Antonio, TX, United States of America Simeth Markus;
DRUID Conference Copenhagen 2011 Talk given at a conference What makes companies pursue an Open Science strategy 15.06.2011 Copenhagen, Denmark Simeth Markus;
EURAM 2011 Annual Conference Talk given at a conference Joining forces: A framework of multi-partner alliances for public good innovations 01.06.2011 Tallinn, Estonia, Estonia Garriga Rubio Helena; Spaeth Sebastian; von Krogh Georg;
Social Computing, Behavioral-Cultural Modeling & Prediction 2010 Talk given at a conference Open Source Software Development: Communities Impact on Public Good 31.03.2011 Washington, DC, United States of America Spaeth Sebastian; von Krogh Georg;
Strategic Management Society Annual Meeting 2010 Talk given at a conference Open source software development: Towards a framework for public-good based multi-alliance (preliminary results) 01.09.2010 Rome, Italy, Italy Garriga Rubio Helena; Spaeth Sebastian;
User and Open Innovation Conference 2010 Talk given at a conference The Influence of Openness in Innovative Performance: The Eclipse Case 02.08.2010 Cambridge, MA, United States of America Spaeth Sebastian; Garriga Rubio Helena; von Krogh Georg;
TUHH User and Open Innovation Workshop 2009 Talk given at a conference Open Source software development 06.10.2009 TU Hamburg, Germany, Germany Spaeth Sebastian; von Krogh Georg;


Communication with the public

Communication Title Media Place Year
Media relations: print media, online media Wie offen sind Schweizer Firmen? NZZ German-speaking Switzerland 2012

Associated projects

Number Title Start Funding scheme
101412 Die Stadtverwaltung Berns. Der Wandel ihrer Organisation und Aufgaben von 1832 bis zum Beginn der 1920er Jahre 01.06.2003 Publication grants
106932 The role of users in corporat innovation 01.10.2005 Project funding (special)

Abstract

Research on the effectiveness and efficiency of open innovation processes aims at understanding the organizational and managerial conditions for and implications of creating sustainable open innovation. Since its introduction by Henry Chesbrough (2003), the concept of open innovation as a source of knowledge and contributor to the firm’s competitiveness has attracted considerable attention. Open innovation “assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as they look to advance their technology” (Chesbrough et al., 2006: 2). According to Chesbrough, “inflow is concerned with the exploitation of existing ideas and knowledge outside the firm’s boundary” (2006: 2). While the academic literature on this topic has mostly focused on the utilization of readily available external knowledge, we argue it has so far neglected how that knowledge was originally created. The understanding of open innovation is incomplete in terms of the processes that enable knowledge reuse and knowledge co-creation, in particular regarding their effectiveness and efficiency. It is important to ask how knowledge can be co-created between volunteers and firms, between users and manufacturers, and between communities and firms. For example, to investigate the specific activities that companies and individuals undertake to make their knowledge reusable; the strategies of problem formulation and solution search across knowledge domains; and how actors who co-create new knowledge structure their interactions. For all these processes, research on open innovation has only started to question the effectiveness and efficiency compared to processes that take place within one organization. Our proposed research agenda seeks to explore the effectiveness and efficiency of open innovation processes because the current open innovation literature promises gains and additional sources of income unavailable to closed innovation, taking place within one organization (Chesbrough, 2003). A research agenda that examines the effectiveness and efficiency of open innovation processes that goes beyond the mere exploitation of existing knowledge is needed in order to identify useful practices and enable managers to implement open innovation processes successfully. The co-creation of new knowledge across organizations frequently involves volunteers who contribute their ideas without receiving financial compensation (von Hippel and von Krogh, 2003, Baldwin et al., 2006; von Hippel, 2005). The interaction of paid and unpaid innovators poses the challenge of sustainable motivation to contribute, since paid contributors might crowd out unpaid contributors to an innovation project (Osterloh and Rota, 2007). The private-collective model of innovation, which describes the private provision of public goods (von Hippel and von Krogh, 2003), depends on carefully balanced incentives at the starting point because conflicts of interest can prevent knowledge sharing entirely (Gächter et al., 2008). What makes open innovation last and generate value for companies and benefits for volunteers? The practices that prompt firms and volunteers to freely share knowledge with other firms play out over time and depend on the motivations and the institutional arrangements that enable or constrain these practices. Beyond simple participation by volunteers in open innovation projects, research into the effectiveness and efficiency asks questions about the contributions and the quality of contributions. We answer these questions by approaching motivation from a social practice perspective. This perspective may help to understand individual motivation in the context of innovation-related work (Brown and Duguid, 1991) and in the context of institutions that enable and constrain the social practice (MacIntyire, 1984). The effectiveness and efficiency of open innovation processes ultimately depend on individual and firm motivation and the social practices these processes build and draw upon. Our research agenda aims to break new ground in open innovation research by applying a social practice perspective and carefully distinguishing between knowledge reuse and knowledge co-creation. As a result, the effectiveness and efficiency of open innovation processes can be analyzed in a more fruitful manner.We pose two main research questions: (1) what motivations serve as antecedents to, and are supported by open innovation processes; (2) how and why are these open innovation processes effective and efficient? The two questions are related: The social practice perspective on open innovation helps us better understand the motivations of individuals who start and continue to contribute high quality work to open innovation projects. The study of specific processes of search and problem solution matching contributes to an understanding of effective open innovation in collaboration with external agents. Testing a model of software component reuse (Haefliger et al., 2008) developed in the context of Open Source software (OSS) in a corporate context may shed light on the differences of motivation across the two contexts. OSS serves as a prime example of open innovation due to the joint participation of both volunteers and companies (Shah, 2006; Stewart et al., 2006). In addition, due to the considerable costs of corporate software reuse programs, the model may generate insights into efficiency aspects of knowledge reuse, potentially efficiency gains of open versus closed innovation processes.We propose three research streams as part of our agenda, each dealing with aspects of effectiveness and efficiency of open innovation processes: Motivation, Knowledge Reuse, and Knowledge Co-creation. Open innovation cannot exclusively rely on the inflow and sales of readily available, existing knowledge but needs to stimulate and enable the creation of knowledge by individuals and organizations outside the firm. Motivation is critically linked with open innovation processes. If firms cannot motivate members to contribute to a project it will fail to be an open innovation project and will not exhibit any of the advantages that come with open innovation, namely efficient use of both in-house and external knowledge (Chesbrough, 2003). The motivation and continued contributions of outside agents appear to be a key factor for the effectiveness of open innovation projects. The existing literature on motivation in open source software (OSS) development, see next section, has led us to conclude that OSS developers view their participation in communities as a social practice they feel attached to. Understanding, facilitating, and shaping the social practice is, thus, critical to enable long-term contributions to OSS projects and potentially to projects outside the OSS community as well. Research on Knowledge Reuse deals with the efficient reuse of existing knowledge across knowledge domains. We argue that reuse can make open innovation projects more effective (by bringing in ideas across knowledge domains that an organization does not usually have access to) as well as more efficient (by reusing existing building blocks). The proposed research projects on knowledge reuse deal with both software and non-software based innovation projects. Knowledge Co-creation, finally, deals with the creation of new knowledge that suits the focal firms’ open innovation projects. We will investigate how a firm can identify opportunities, search partners, and facilitate knowledge co-creation through a set up of appropriate organizational structures and enabling contexts; how a firm can keep control of what is being created while receding control to an open innovation project; and under what conditions competitors will join and co-create knowledge.
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