Business Model Innovation in Networks: How to Work With Openness

Abstract

Open innovation delivers important impetus for research and business practice. Open innovation research focuses on product and process innovation. Still the idea of open innovation has strong advantages for business model innovation. Firms can use outside-in, inside-out and coupled processes to implement open business model innovation. Our mixed methods approach combines an in depth multiple case study that comprises eight cases as well as a quantitative survey based study of 485 firms. Case study data points to advantages and challenges of open business model innovation among firms in networks. Quantitative results reveal that modularity drives business model innovation in alliances. Yet, larger networks do not relate to greater business model innovation. Instead, results show an inverted U-shape relation between modularity and business model innovation for varying network sizes.