Open Innovation for High-Tech Industry Collaborating in an Interdependent Impermanent World

Abstract

Open innovation is a powerful framework encompassing the generation, capture, and employment of intellectual property at the firm level. We identify two fundamental obstacles for firms in applying the concept of open innovation: what open innovation is actually involves and how to motivate outsiders to supply an ongoing stream of external innovations. This latter challenge involves a paradox, why would firms spend money on R&D efforts if the results of these efforts are available to rival firms? To explore these challenges, we examine the activity of firms in open-source software to support their innovation strategies. Firms involved in open-source software often make investments that will be shared with real and potential rivals. Open-source as an open innovation strategy has two key components: shared rights to use the technology, and collaborative development of that technology using donated labor. We conclude with concept for how collaborating may apply in hi-tech industries and offer some possible avenues for future research on open innovation.