Abstract
Purpose Organizations that decide to invest in innovation must define how this will be done: internally, externally or in a hybrid way, developing internal research and establishing partnerships with other agents of the innovation system. This paper aims to analyze whether the service companies’ intensity of openness and innovation efforts are related to their innovative and financial performances. Open innovation assumes that organizations should use external and internal resources as they develop new technologies. Design/methodology/approach The study used data from the survey of technological innovation (Pintec). As regards innovations, it was considered the commercial and operational innovation performances and the innovative novelty performance. As regards financial performance, it was considered the overall net sales per employee. The intensity of open innovation was measured by the combination of breadth and depth (diversity and importance of the interfaces). The innovative effort was measured by spending on innovation activities. Regressions were applied to evaluate a set of hypotheses. Findings The results indicate that companies with a greater orientation toward open innovation presented better scores. The results also lead to the conclusion that foreign firm ownership structure and being part of a corporate group were the factors that caused the greatest impact on financial performance in the service sector. Practical implications The study provides empirical data on the importance of open innovation in improving organizations' performance, especially the breadth of open innovation. Originality/value The study contributes to expanding the research field addressing the relationship between service innovation and performance.
Highlights
Developing or not developing innovation activities is an important decision of a company to make because it entails an investment whose financial returns are usually obtained in the© Ticiana Braga De Vincenzi and João Carlos da Cunha
The focus of our research is the service sector because of the importance of the market share of this sector in the economy, which represented more than 70% of the gross domestic product (GDP) in Brazil in 2015 (Ministério da Indústria, Comércio Exterior e Serviços, 2021), and because there is still little research dedicated to the analysis of the relationship between service innovation and performance (Ferraz & Santos, 2016)
Open innovation can be a solution because it makes use of external resources in the development of new projects and allows the company to profit from the commercialization of ideas in diverse channels or companies operating in different markets (Stal, Nohara, & Chagas, 2014)
Summary
© Ticiana Braga De Vincenzi and João Carlos da Cunha. Published in Innovation & Management Review. Justifying larger investments in internal innovation activities has become a challenge for companies considering the high costs of the development of innovation, in addition to diminishing product life cycles In such scenario, open innovation can be a solution because it makes use of external resources in the development of new projects and allows the company to profit from the commercialization of ideas in diverse channels or companies operating in different markets (Stal, Nohara, & Chagas, 2014). R&D intensity, which is measured by R&D expenditures divided by sales, was considered by the authors as a complementary matter in the external exploration toward innovative performance Even though these indicators bode well with the effects stemming from innovations carried out by companies, it is important to remember that several firms’ characteristics can influence results.
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