Abstract
To innovate, firms often need to draw from, and collaborate with, a large number of actors from outside their organization. At the same time, firms need also to be focused on capturing the returns from their innovative ideas. This gives rise to a paradox of openness—the creation of innovations often requires openness, but the commercialization of innovations requires protection. Based on econometric analysis of data from a UK innovation survey, we find a concave relationship between firms’ breadth of external search and formal collaboration for innovation, and the strength of the firms’ appropriability strategies. We show that this concave relationship is stronger for breadth of formal collaboration than for external search. There is also partial evidence suggesting that the relationship is less pronounced for both external search and formal collaboration if firms do not draw ideas from or collaborate with competitors. We explore the implications of these findings for the literature on open innovation and innovation strategy.
Highlights
This paper explores how the choices of firms to be open to different external actors are related to the choices they make about their appropriability strategy, that is, their approach to protecting their knowledge against being copied and to appropriating the returns from their innovative activities
We examine how the type of external engagement that firms choose is connected to the relationship between appropriability strategy and openness, suggesting that the negative effect of the link between appropriability and openness is stronger for formal collaboration breadth than for external search breadth
We find that the coefficient of appropriability strategy is significantly higher for innovation collaboration than for external search (p = 0.0047) and that the negative coefficient of appropriability strategy squared is significantly lower for innovation collaboration than for external search (p = 0.0025)
Summary
This paper explores how the choices of firms to be open to different external actors are related to the choices they make about their appropriability strategy, that is, their approach to protecting their knowledge against being copied and to appropriating the returns from their innovative activities. A major problem associated with accessing external sources of knowledge relates to the fact that, in order to obtain knowledge, organizations have to reveal some parts of their own knowledge to external actors Managers make their firm “open” by engaging with a broad set of external actors in their innovation activities, and have to protect their own firm’s knowledge from being copied by competitors. Based on an analysis of a large sample of manufacturing firms from the 4th wave of the UK Innovation Survey, we find partial or full support for the hypotheses
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
