Multiple Strategies of Appropriating Value from Innovation: Ownership and Temporal Perspectives

Abstract

The discussion on appropriability as a major determinant of firm competitiveness is relatively established in the fields of strategy and innovation management. The classic perspective of appropriability suggests that innovating firms seek individual value capture from activities that are specific to their organizations—excluding others, or at least keeping some control over their innovations. These widely held assumptions have led the appropriability discussion to fall short in explaining the latest developments in the changing business reality, such as the emergence of open forms of innovation and business models that abandon or are indifferent to control and ownership of resources. By theorizing appropriability along two axes, ownership and time, we recognize and articulate multiple strategies available for appropriating value from innovation. In particular, we identify four categories of innovation appropriability: primary, derivative, generative, and prospective, and identify their central features. This categorization contributes by enhancing a dynamic view on appropriability.