The Relation between Different Open Innovation Practices and Firm’s Innovation Performance

Abstract

Case study representations and quantitative research in the field of open innovation indicate significant association of open innovation with a firm’s innovation performance. However, open innovation is not dichotomous, it consists of several distinct practices. This study aims to contribute to the existing knowledge on open innovation in organisations by disentangling among different open innovation practices, (i.e. inward ip licensing and external participation, out sourcing R&D and external networking, customer involvement, employee involvement, and venturing) and indicating their relation to a firm’s innovation performance.We conceptualize a model in which we propose that all open innovation practices significantly relate to a firm’s innovation performance. We tested the model on a sample of 693 companies from three countries, and found the most significant relation between employee involvement and firm’s innovation performance. Based on a semi-structured interview with a head of open innovation at renowned multinational company, we provide suggestions on how to implement open innovation. We conclude the paper with the discussion of the results for business practitioners, suggesting effective approaches for incorporation of open innovation in their business practice.