External Sources Of Innovation Research Articles

SME owners’ roles for mutual reinforcement of innovation and entrepreneurship in dealing with digital technologies: case studies of selected Indonesian SMEs

ABSTRACT This article explores the relationships among innovation, entrepreneurship, and digital technology, specifically how the management of small and medium enterprises (SMEs) utilise innovation and entrepreneurship to deal with digital technologies and/or how the management leverages digital technologies for innovation and entrepreneurship. A qualitative research approach using a case study was employed to examine the phenomena, focusing on deep observations. The research found that SME owners play crucial roles in three areas: (i) demonstrating entrepreneurial ability through knowledge, experience, talent, and innovation; (ii) performing strategic functions by leveraging external sources of innovation, with the help of digital technology; and iii. acting as digitally minded entrepreneurs to enhance manufacturing processes and establish new marketing channels. The mutual reinforcement of innovation and entrepreneurship in dealing with digital technology, is influenced by both user and demand-driven innovation, knowledge and technology-driven innovation, experiential knowledge-driven innovation, articulation of innovation outcomes, digital network-based marketing, and technical guidance on digital transactions in e-commerce and e-business. This research confirmed that there is a mutual reinforcement between the innovation and entrepreneurship of SMEs in adopting digital technology. New insight for digitally minded entrepreneurs is the use of digital technology to boost business efficiency toward global enterprises’ competitiveness and sustainability.

Understanding the relationship between competitive strategy and product-service innovation: the role of the paradox of openness

PurposeThis study aims to investigate the relationship between strategy intent (product-service innovation intention) and outcome (product-service innovation outcome), and the role that external sources of innovation play in influencing this relationship.Design/methodology/approachUsing data obtained from the community innovation survey, we apply a logit regression to a sample of 1,419 Portuguese firms. By examining the moderating effect of open innovation breadth, we assess how the relationship between differentiation intent and outcome is contingent upon the involvement of external stakeholders.FindingsOur findings reveal that the relationship between differentiation intent and outcome is contingent upon the moderating effect of open innovation breadth. Our analysis suggests that the negative influence of different sources of innovation can be addressed by adopting a paradox lens.Practical implicationsThis research provides valuable insights for managers. By simultaneously pursuing a differentiation strategy and engaging in collaboration with external sources, firms may compromise their ability to effectively differentiate their offer. Managers should consider the potential tensions arising from internal and external stakeholder relationships to optimize their innovation strategies.Originality/valueThis study contributes to the existing literature by shedding light on the role of external innovation sources in influencing the relationship between differentiation intent and outcome and the importance that information systems may have in this relationship. By exploring the moderating effect of open innovation breadth, we provide a nuanced understanding of how firms can navigate organizational tensions and leverage innovation for competitive advantage.

The value and structuring role of web APIs in digital innovation ecosystems: The case of the online travel ecosystem

Interfaces play a key role in facilitating the integration of external sources of innovation and structuring ecosystems. They have been conceptualized as design rules that ensure the interoperability of independently produced modules, with important strategic value for lead firms to attract and control access to complementary assets in platform ecosystems. While meaningful, these theorizations do not fully capture the value and structuring role of web APIs in digital innovation ecosystems. We show this with an empirical study of the online travel ecosystem in the 26 years (1995–2021) after the first Online Travel Agencies (OTAs) were launched. Our findings reveal that web APIs foster a dynamic digital innovation ecosystem with a distributed networked structure in which multiple actors design and use them. We provide evidence of an ecosystem where decentralized interfaces enable decentralized governance and where interfaces establish not only cooperative relationships, but also competitive ones. Instead of locking in complementors, web APIs enable the integration of capabilities from multiple organizations for the co-production of services and products, by interfacing their information systems. Web APIs are important sources of value creation and capture, increasingly being used to offer or sell services, constituting important sources of revenue.

Exploring SMEs innovation paths with augmented and virtual reality technologies

PurposeAugmented reality (AR) and virtual reality (VR) are increasingly recognized among technologies potentially driving the digital innovation of small and medium-sized enterprises (SMEs). Nevertheless, the implications of AR/VR adoption in innovation processes have yet to receive much attention to date, with the need to explore the issues facilitating a systematic implementation in the SME context. This study aims to investigate the possible innovation paths of SMEs as a result of AR/VR adoption.Design/methodology/approachThe authors performed a multiple case study research involving six Italian SMEs in manufacturing and service sectors that are investing in AR and/or VR solutions and are digitally innovating thanks to these technologies.FindingsAR/VR solutions lead to different types of innovation in SMEs, i.e. for innovating product or service offerings, business processes or even the business model, when AR/VR extends to the company business logic. SMEs demonstrate being able to leverage internal sources with the essential commitment of top management and low resistance of employees in all kinds of AR/VR-enabled innovations. Conversely, they involve different external innovation sources according to the type of innovation pursued. Organizational issues emerged as more relevant than technological issues.Practical implicationsResults contribute to the literature on digital transformation of SMEs and provide managerial guidance on innovation sources and organizational issues to be considered to effectively deploy AR/VR solutions into specific innovation paths.Originality/valueThis study explores the impact of emergent technologies in the innovation process along with multiple perspectives, degree of complexity, and strategic importance in the SME context.

Tracing innovation efficiency: Review and bibliometric analysis

While “innovation efficiency” has become widespread and intuitive to many over the past few decades, its definition, measurement, and understanding have evolved. This paper offers a review of the economic literature centred on the dynamics of the innovation efficiency concept. We conducted a bibliometric analysis of 5,123 scholarly publications on Scopus to broaden the understanding of innovation efficiency phenomena, complemented by an in-depth science map analysis of 764 publications. We illustrate the accelerated growth of literature in the innovation-efficiency domain in recent years. Despite this significant growth, research in this area remains fragmented, underscoring the need for the systematic approach undertaken in this study. Through the bibliometric analysis, we discerned that the focus of innovation-efficiency-related studies has shifted from internal organisational issues to a comprehensive perspective on innovation, encompassing exogenous elements and external sources of innovation. We delineate three periods in the evolution of central themes within the innovation efficiency domain from 1998-2022: Initial focus on individual firms’ performance, progressing to external and network determinants of innovation, and recently, the link between innovation efficiency and green innovation in the third period. We also identified two primary research methodologies: (i) Qualitative surveys and (ii) Quantitative methods using regression analysis, mathematical models, and data envelopment analysis. Scientists, policymakers, and investors can utilise these findings to gain insights into the paramount aspects underpinning research in the innovation efficiency phenomena.

Hybrid innovation logics: Exploratory product development with users in a corporate makerspace

AbstractAdvances in digital manufacturing technologies have not only altered R&D processes for new product development (NPD), but they have also opened new possibilities for user innovators to engage in traditionally closed innovation processes. However, incorporating external sources of user innovation—through design challenges or crowdsourcing, for example—can introduce competing logics into exploratory innovation processes. Using the lens of complexity, we conduct an ethnographic study of the competing logics at work in the NPD processes of a corporate makerspace launched by a large firm in the consumer appliances industry. The makerspace was founded with a hybrid logic, intended to combine the community logic of makers with the corporate logic of the parent organization. We analyze the conflicts that arose between logics and how the hybrid logic evolved through four iterations of the NPD process. We identify how managing multiple logics led to structural and identity changes, and we explain how two mechanisms—structural bridging and stakeholder identity linking—enabled the makerspace to innovate with a hybrid logic and overcome the constraints of a dominant logic on the NPD process. The results offer insights into dynamic organizational responses to complexity, how new business initiatives can be structured to act as exploratory units for corporate parents, and how corporate makerspaces can help incorporate external sources of innovation.

DUI it yourself: Innovation and activities to promote learning by doing, using, and interacting within the firm

ABSTRACT Implicitly or explicitly, much innovation policy treats investments in research and development (R&D) as the main input to innovation. A large body of literature in innovation studies has challenged this, highlighting the role of external sources of innovation and of innovation based on learning by doing, using and interacting (DUI). Nonetheless, there has been limited empirical research on how firm-internal activities to promote DUI affect innovation, and on how important such activities are relative to internal R&D and to external sources of knowledge. We also know little about how internal DUI activities interact with internal R&D and with external knowledge sourcing. We address these gaps using Norwegian Community Innovation Survey data from 2010. We find that internal DUI is an important driver of new-to-market product innovation. Further, the results show partial substitution effects between internal DUI and internal R&D, as well as between internal DUI and external DUI.

Sources of Innovation Revisited: Patterns in Firms’ Usage of Internal and External Search

Recent open innovation literature has emphasized external knowledge search and the use of a diverse set of external innovation sources. But firms also have a diverse set of internal innovation sources, and we show that there are distinct patterns across external and internal sources that reflect differences in how firms create and capture value. Our analysis of the innovative activities of 256 large firms from seven countries and across seven industry sectors reveals two distinct innovation search strategies: “tech-focus,” which emphasizes exploration and is associated with more innovative outcomes, and “market-focus,” which emphasizes exploitation and is associated with higher market value. Finally, we show that characterizing innovation sourcing as tech-vs.-market better explains differences in firm performance than traditional measures such as openness.

INNOVATION DIVIDE IN THE WORLD ECONOMY: CHINA’S CONVERGENCE TOWARDS THE TRIAD

The objective of this article is to assess the dynamics of the innovation divide between China and the Triad, as well as to determine the factors that influence its evolution. The Triad consists of three economies traditionally dominating the world economy: the United States, the European Union, and Japan. The methodology involves the decomposition of the innovativeness of the economy into innovation capability, innovation position, and the relationship between them, which indicates the efficiency of the innovation system. The analysis of dynamic indexes and σ-convergence in all these components confirms that the global economy has been gradually losing clear polarization into innovation leaders, found among developed countries and innovation followers, which have traditionally been associated with developing nations. In addition to demonstrating fast improvement in the Summary Innovation Index of China towards the Triad, the paper has a clear contribution by showcasing China’s improvement through the decomposed factors of the innovativeness of the economy. In comparison with the Triad, China has a proportionally higher innovation position and efficiency of the innovation system and a lower level of innovation capacity. This demonstrates its dependence on external sources of innovation and international technology transfer, e.g. through foreign direct investments.

The relationship between the sources of innovation and types of innovation in industry

This article aims to understand the relationship between the sources of innovation and types of innovation in industry. The study was carried out in a multinational car components company and explores the effects of internal and external sources of innovation on the generation of product/process and radical/incremental innovations. Data were obtained via a questionnaire and processed by qualitative and quantitative methods. The characterization of the company and its research and development (R&D) projects disclosed the importance of continuous improvement, where the involvement of senior management, the high percentage of R&D and the number of innovation projects are indicators of a company with a strong innovative culture. The results showed that higher education was the most significant source of innovation in projects where only process innovation was a factor. Furthermore, knowledge generated by collaboration with affiliated companies was associated with the introduction of product-only innovations. As for the degree of novelty, the results indicate that the introduction of radical innovations is not determined at the external level by customers.

The impacts of knowledge management practices on innovation activities in high- and low- tech firms

This paper presents an empirical study on how knowledge management practices and innovation sources affect product innovation performance, among the 152 manufacturers in the low- and high- tech industries in China. The results indicate that external innovation sources are positively correlated with innovation activities and new product performance. Intellectual Property (IP) and knowledge management practices (KMP) are positively correlated with innovation activities, and KMP is positively correlated with innovation sources. The dual effect of KMP shows its indispensable effect on the new product development for both high-tech and low-tech firms, but for low-tech firms, such effect is relatively weak. This empirical study shows that IP management is critical to high-tech but not low-tech firms. We also found that, for innovation activities, low-tech depends on the external sources of innovation whilst high-tech firms do not.

Innovation Through Startup Collaboration: Build a Relationship With Your Peer Startups

Startups could foster open innovation by partnering with other startups as external sources of innovation. The ever-growing network of diverse software startups is an opportunity for these startups to gain access to significant knowledge and expertise from the broader network. This peer partnering allows them to bridge gaps in their competencies that hinder their abilities to gain traction. The collaborative network provides managers with opportunities to sustain competitive advantage but requires managerial decisions to be made carefully to avoid partners becoming competitors. Larger partnerships generate network effects that enhance the collaborative network value, largely improving the success rates of the startup community.

The Impacts of Knowledge Management Practices on Innovation Activities in High- and Low-Tech Firms

This paper presents an empirical study on how knowledge management practices and innovation sources affect product innovation performance, among the 152 manufacturers in the low- and high- tech industries in China. The results indicate that external innovation sources are positively correlated with innovation activities and new product performance. Intellectual Property (IP) and knowledge management practices (KMP) are positively correlated with innovation activities, and KMP is positively correlated with innovation sources. The dual effect of KMP shows its indispensable effect on the new product development for both high-tech and low-tech firms, but for low-tech firms, such effect is relatively weak. This empirical study shows that IP management is critical to high-tech but not low-tech firms. We also found that, for innovation activities, low-tech depends on the external sources of innovation whilst high-tech firms do not.

Characteristics of supplier performance measurement systems in collaborative innovation projects: the role of the purchasing department

PurposeIn the wake of the growing popularity of the open innovation approach, leveraging suppliers as external sources of innovation has attracted increasing interest from scholars and practitioners. Successful supplier involvement largely depends on an effective performance measurement process, but both supply chain management and innovation management literature have paid limited attention to this aspect. This paper aims to fill this gap by illustrating how companies measure the performance of the suppliers involved in their innovation projects and what role is played by the purchasing department.Design/methodology/approachThis study interviews project stakeholders from nine different organizations acting as focal companies in the supply chains of various industries. This paper complements this on-field information with a vast amount of data collected from secondary project documents. Structured data coding and analysis allow us to discuss how companies redesign their performance measurement systems to ease the collaboration with suppliers in innovation and what factors underly these decisions.FindingsThe findings show that, in many cases, supplier performance measurement systems deviate from their typical characteristics to support collaboration in innovation projects. They integrate quantitative and qualitative measures, include contributions from different project stakeholders and are oriented toward high visibility and transparency with suppliers. A more substantial redesign of these systems is favored when purchasing is assigned to strategic project responsibilities and possesses higher absorptive capacity.Originality/valueThe results complement the knowledge for the supply chain management field, where supplier performance measurement systems have been discussed in the context of traditional buyer-supplier relationships, but not comprehensively in innovation projects and not considering the role of purchasing. Findings also contribute to the innovation management literature, which has mostly focused on what aspects need to be measured for innovation partners, rather than how to manage the performance measurement process in practice.

What does it mean to be open? A typology of inbound open innovation strategies and their dynamic capability requirements

ABSTRACT The benefits of inbound open innovation are widely acknowledged, but not all companies are successful in their attempts to leverage external sources of innovation. Those with dynamic capabilities perform better, but developing and maintaining such capabilities generates costs. Therefore, a given company needs to find out which capabilities are worth investing in. In the current study, I adopt a contingency approach to inbound open innovation. I focus on distinct open innovation strategies that vary according to their approaches to innovative search and accessing complementary knowledge. I develop a typology of six inbound open innovation strategies based on the dimensions of managerial attention (proactive/reactive) and locus of innovation (internal/shared/external). I further report their requirements for four dynamic capabilities: sensing capability, impression management capability, absorptive capacity, and collaboration capability. The findings bring attention to often-ignored reactive strategies for inbound open innovation and provide a nuanced view of how the division of development responsibilities in different phases of the innovation process affects requirements for dynamic capabilities. The study supports managers in implementing successful inbound open innovation strategies by helping them choose a strategy that supports their organization’s overall objectives and strike a balance between underinvestment and overinvestment in dynamic capabilities.

Exploring the role of organisational innovation in the time of COVID-19

COVID-19 has caused profound impacts on the economy and society. In Portugal, many companies needed to temporarily close, and many workers were forced to go into lay-off. However, at the same time, several companies are trying to respond to the challenges posed by this pandemic by introducing organisational innovations that would enable them to respond to the needs of the people and organisations that most require help during this period. In this sense, this study aims to explore the role of organisational innovation in the business sector in Portugal through seven case studies. The findings reveal a very diverse set of initiatives in which the role of internal and external sources of innovation stands out simultaneously. Most of the innovations identified have a procedural focus, while structural innovations have less influence. This study is particularly relevant in the practical dimension by encouraging other countries and companies to replicate these initiatives.

Exploring the role of organisational innovation in the time of COVID-19

COVID-19 has caused profound impacts on the economy and society. In Portugal, many companies needed to temporarily close, and many workers were forced to go into lay-off. However, at the same time, several companies are trying to respond to the challenges posed by this pandemic by introducing organisational innovations that would enable them to respond to the needs of the people and organisations that most require help during this period. In this sense, this study aims to explore the role of organisational innovation in the business sector in Portugal through seven case studies. The findings reveal a very diverse set of initiatives in which the role of internal and external sources of innovation stands out simultaneously. Most of the innovations identified have a procedural focus, while structural innovations have less influence. This study is particularly relevant in the practical dimension by encouraging other countries and companies to replicate these initiatives.

FORMATION OF AN OPEN INNOVATION MODEL IN THE CONDITIONS OF DIGITAL TRANSFORMATION OF SOCIETY

The active development of globalization and the formation of the information society contribute to the transformation of approaches to innovative activities. The purpose of the article is to consider the formation of an open innovation model in the modern information space. The latest approaches to the openness of knowledge, the creation of platforms for the development of open science, the tendency to increase the openness of research processes are reflected in the concept of open innovation. The model of open innovation provides a new cycle of creation and implementation of an innovative product. This model involves the active use of information about innovative products from the outside, increasing the availability of such information. The open innovation model determines not only the active use of external sources of innovation, but also provides for the increase in the openness of their own developments and the willingness of companies to the fact that at any stage innovation can go beyond the company and be implemented by other business structures. In the EU countries, the concept of open innovation is reflected in the principles defined in the European policy for knowledge transfer and open innovation. The new paradigm of innovations "Open Innovation 2.0" of the EU is the basis for the formation of their model in Ukraine. "Open Innovation 2.0" is based on the model of four spirals, where government, industry, academia and citizens work together to create the future together and carry out structural changes. Knowledge transfer, ecosystem approach, development of structures and mechanisms for exchange of information and experience are identified as the main tools for the development of open innovation. It is defined in the article that the active participation of the country in the European Open Science Cloud and the European Cloud Initiative are important stages in the development of the open innovation model in Ukraine. The European Open Science Cloud is Europe's virtual environment for all researchers to store, manage, analyze and reuse data for research, innovative and educational tasks. The European Open Science Cloud and the European Cloud Initiative are elements of integration into the European Research Area as a basis for access to new knowledge and increasing their openness. The development of the information society in Ukraine contributes to the formation of conditions for the implementation of the main components of the open innovation model defined by the European policy of knowledge transfer and open innovation. The transition to a new perception of innovation, the use of all opportunities to obtain new knowledge in the open scientific space, active participation in the system formation processes for open knowledge transfer in the EU can create a solid foundation for innovative changes in the national economy.

The sources of municipalities’ innovation in the management of weather disaster risks, their relationships, and their antecedents

ABSTRACT This article presents the results of a study on the use of internal and external sources of innovation by municipalities to deal with weather hazards. Using data collected by an online survey of municipal emergency management coordinators in Quebec – Canada, this study shows that municipalities rely primarily on their expertise and, to a lesser extent, on peer organisations and upper levels of governments to develop new solutions to weather hazards. In addition, this study finds weak support for the complementarity hypothesis between internal and external sources of innovation and suggests strongly that these sources of innovation are not substitutable. The capacity and vulnerability of municipalities, as well as political support for initiatives to improve the management of weather disasters, seem to be significant drivers of innovation. Finally, efforts aimed at strengthening public organisations’ internal capacities and creating incentives to facilitate collaborations between public organisations are important levers to stimulate innovation.

How Corporations Source Innovation

This paper introduces a 2018 innovation survey of 300 large firms sampled to be representative of corporate innovation in 8 countries from around the world. Senior innovation leaders at these large companies were asked more than 100 questions about how they innovate and which internal and external innovation sources they use. These questions also gathered data on two innovation projects per firm, for a total of 600 across our sample. We find that open innovation at these companies is pervasive, but also recent. Only in the past five years have many firms started innovating with external partners like universities, third-party experts, startups or crowd. Overwhelmingly, firms use these new external innovation sources for digital technologies where they have internal capability shortfalls. Despite the remarkable growth in the use of external innovation sources, internal innovation sources remain more important for companies and produce the projects most likely to provide competitive advantage.