Evaluation of Open Innovation with R&D Alliances for Breakthrough Technologies in the Energy Sector
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In the energy industry, a time of dynamic innovation and uncertainties drives R&D incumbents to extend their technology screening process to the early technology lifecycle. Many early breakthrough technology innovations stem from academia and are developed by academic spin-offs. In these situations an incumbent’s future technology organization (FTO), focused on open innovation, needs to expand its evaluation and development capabilities towards R&D alliances with academic technology spin-offs. In the light of the open innovation and real option frameworks this study analyzes R&D projects using the real options analysis (ROA) and discusses the critical decision of whether to develop technology internally or externally. It explores R&D alliances between academic spin-offs and a large power industry player and investigates the concept and role of a FTO in the open innovation process. A model will be introduced to operationalize the FTO concept and practically evaluate the risk of open innovation with R&D alliances for breakthrough technologies. Contrary to the common view that risks increase when open innovation is applied along with external development of a breakthrough technology in R&D alliances, the present study shows that the risks and uncertainties can be mitigated and controlled when applying ROA and the FTO model.Keywords:
Open Innovation
Innovation process
The introduction of the concept of open innovation by Henry Chesbrough has energized the notion that the generation and success of innovations in organizations depend on sources of information and knowledge, especially external sources. In accordance with the open systems perspective of organization, we assume the process of innovation is inherently open and define innovation openness as a continuum reflecting the extent to which an organization opens up the innovation process to external and internal information actors and entities. The emerging literature on open innovation is reviewed. The perspectives, themes and trends are summarized. Innovation openness is juxtaposed with innovation type and radicalness to propose models to expand this line of innovation research. Ideas to include sources of internal information and knowledge, apply openness to nontechnical innovations, adoption of innovation, and integration of open innovation with more established elements of organizational innovation are offered.
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This paper uses process theory as a theoretical lens to analyze AstraZeneca's enactment of an open innovation initiative with the purpose of strengthening the firm's surrounding innovation ecosystem. Based on empirical data collected over 7 years, we develop a process model of open innovation enactment and explain how the initiative gradually transformed while maintaining its guiding principles, which were set from the start. In applying a process perspective, we highlight open innovation initiatives as dynamic and evolutionary – but not deterministic – developments. As such, we provide a comprehensive and more nuanced understanding of not only what open innovation is but also how it becomes . This study also contributes to the innovation ecosystem literature by theorizing how firms orchestrate innovation ecosystems through open innovation initiatives over time.
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AbstractThe following sections are included:IntroductionLiterature ReviewProduct and process innovationThe paradigm of open innovationTheoretical Framework and HypothesesOpen approaches and innovation performanceExternal knowledge sourcing and innovation performanceInternal R&D and innovation performanceAbsorptive capacity and innovation performanceMethodsSampleMeasuresDependent variablesIndependent variablesControl variablesResultsDiscussion and ConclusionAcknowledgementReferences
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Open Innovation (OI), a paradigm coined by Chesbrough in 2003, is not only 'openness towards innovation', it also represents a firm-view-point-based innovation strategy, which suggests the involvement of external actors in the innovation process. The present paper is part of an on-going discussion on open issues related to OI and the advantages, strengths, challenges and limits of its implementation, dealing with the frequently debated topic of the future of this paradigm. What has emerged from this study is that a clear one-way outline of the OI implementation process does not exist, either in the literature or in practical cases, but common catalyst points, such as a general 'open' attitude, the existence of a technology transfer approach, an Intellectual Property protection strategy, and the frequent use of search routines, are identifiable. However, the future of this paradigm is not clear, as the concept may fade away because the process could be fully integrated in the innovation process.
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Open innovation is a paradigm that focuses on the benefits of inbound and outbound knowledge flows to improve the success of an organization's innovation efforts. Since its introduction early in this century, the concept of open innovation has evolved and matured considerably through thousands of subsequent publications. This has included refinement of the open innovation theory across different contexts and levels of analysis, as well as better evidence regarding the costs and benefits of open innovation strategies. Researchers have also continued to build upon and integrate with other theories, including business models, platforms, organizational innovation and the theory of the firm. Here I suggest two under-researched areas of open innovation. One is the tension in open innovation collaborations when one party has pecuniary motives and the other does not. The second is how a better understanding of the geographic localization of knowledge flows impacts the process of open innovation.JEL Codes: O36, O30, O31, R11
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Firms may open up their innovation processes on two dimensions. While inbound open innovation refers to the acquisition of external technology in open exploration processes, outbound open innovation describes the outward transfer of technology in open exploitation processes. Prior open innovation research has focused on the inbound dimension, whereas the outbound dimension has been relatively neglected. Therefore, this article addresses the relationship between outbound open R&D strategies and firm performance. We use data from 136 industrial firms to test four hypotheses on the moderating effects of environmental factors in the relationship between open innovation strategies and firm performance. The results show that the degree of technological turbulence, the transaction rate in technology markets, and the competitive intensity in technology markets strengthen the positive effects of outbound open innovation on firm performance. By contrast, the degree of patent protection does not facilitate successful open innovation. The results are crucially important to managers because they show under what environmental conditions open innovation strategies enhance performance.
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At present, innovations constitute a key determinant of a competitive position among market entities. Recent years have seen a change in the approach towards innovations and a gradual shift from a closed to an open model of innovation. The changing paradigm of innovation is accompanied by the question how to commercialize about outcomes of open innovation processes. The aim of the present article is to review models of the commercialization of innovations which are applied in innovation processes based on principles typical of the open innovation model.
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The paper concerns the role of open innovation within public R&D&I programmes. The history of innovation management shows that the methods used to organize research and development work have evolved towards open innovation model. The first, original, concept of “open innovation” (Chesbrough) has been coined to explain how companies diversify technology sourcing and commercialization methods, and thus represents a perspective of industry. On the other hand, Open Innovation 2.0 approach emerged in the context of policy-making and displays features characteristic of innovation systems theory. It enables a more indepth analysis of interactions between different types of actors involved in innovation process and complex R&D ecosystems.
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Purpose – The purpose of this paper is to focus on the adoption of the open innovation paradigm in the bio‐pharmaceutical industry and investigate through which organisational modes (e.g. collaborations, in‐ and out‐licensing) open innovation has been implemented and how these modes are interwoven with the different phases of the drug discovery and development process. Open innovation is currently one of the most debated issues in management literature. Few contributions, however, have paid attention so far to systematically and longitudinally addressing the adoption of open innovation in a specific industry.
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