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On the management of open innovation

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  • Gambardella, Alfonso
  • Panico, Claudio

Abstract

In an open innovation relationship, the party that owns a key asset enjoys bargaining power that discourages the investments of the other party in the collaboration. We show that these incentives can be restored by conferring on the weak party the power to take decisions during the research process – e.g., a pharmaceutical firm with manufacturing and commercialization assets offers the direction of a joint research project to a biotech partner. However, on many occasions, the strong party still captures more value from the collaboration by retaining the power to take decisions during research even if it produces less innovation value and fewer aggregate profits. We conclude that the potential of open innovation is underexploited. In particular, owners may not release enough power to take decisions on the use of their assets.

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  • Gambardella, Alfonso & Panico, Claudio, 2014. "On the management of open innovation," Research Policy, Elsevier, vol. 43(5), pages 903-913.
    • Handle: RePEc:eee:respol:v:43:y:2014:i:5:p:903-913
    DOI: 10.1016/j.respol.2013.12.002
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    Cited by:

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    2. Cavallo, Angelo & Burgers, Henri & Ghezzi, Antonio & van de Vrande, Vareska, 2022. "The evolving nature of open innovation governance: A study of a digital platform development in collaboration with a big science centre," Technovation, Elsevier, vol. 116(C).
    3. Augustina Asih Rumanti & Afrin Fauzya Rizana & Lutfia Septiningrum & Rocky Reynaldo & Mohammad Mi’radj Isnaini, 2022. "Innovation Capability and Open Innovation for Small and Medium Enterprises (SMEs) Performance: Response in Dealing with the COVID-19 Pandemic," Sustainability, MDPI, vol. 14(10), pages 1-21, May.
    4. Haijun Wang & Sardar M. N. Islam, 2017. "Construction of an open innovation network and its mechanism design for manufacturing enterprises: a resource-based perspective," Frontiers of Business Research in China, Springer, vol. 11(1), pages 1-21, December.
    5. Yildirim, Ercan & AR, Ilker Murat & Dabić, Marina & Baki, Birdogan & Peker, Iskender, 2022. "A multi-stage decision making model for determining a suitable innovation structure using an open innovation approach," Journal of Business Research, Elsevier, vol. 147(C), pages 379-391.
    6. Byungun Yoon & Juneseuk Shin & Sungjoo Lee, 2016. "Open Innovation Projects in SMEs as an Engine for Sustainable Growth," Sustainability, MDPI, vol. 8(2), pages 1-27, February.
    7. Rui Torres de Oliveira & Simona Gentile-Lüdecke & Sandra Figueira, 2022. "Barriers to innovation and innovation performance: the mediating role of external knowledge search in emerging economies," Small Business Economics, Springer, vol. 58(4), pages 1953-1974, April.
    8. Chen, Hsing Hung & Chen, Silu & Lan, Yong, 2016. "Attaining a sustainable competitive advantage in the smart grid industry of China using suitable open innovation intermediaries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 62(C), pages 1083-1091.
    9. Tsinopoulos, Christos & Yan, Ji & Sousa, Carlos M.P., 2019. "Abandoning innovation activities and performance: The moderating role of openness," Research Policy, Elsevier, vol. 48(6), pages 1399-1411.
    10. Sul Kassicieh, 2016. "Technology Entrepreneurship: Progress of a Clinical Approach Through Time," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 7(1), pages 1-22, March.
    11. Wei Gao & Daojuan Wang, 2021. "Will Increasing Government Subsidies Promote Open Innovation? A Simulation Analysis of China’s Wind Power Industry," Sustainability, MDPI, vol. 13(23), pages 1-20, December.
    12. Alireza Javanmardi Kashan & Kavoos Mohannak & Mirko Perano & Gian Luca Casali, 2018. "A Discovery of Multiple Levels of Open Innovation in Understanding the Economic Sustainability. A Case Study in the Manufacturing Industry," Sustainability, MDPI, vol. 10(12), pages 1-21, December.
    13. Bernd Ebersberger & Nils Mevenkamp, 2016. "Open Innovation in Eastern Europe and Central Asia," Journal of Business Administration Research, Journal of Business Administration Research, Sciedu Press, vol. 5(2), pages 8-19, October.
    14. Chih-Yi, Su & Bou-Wen, Lin, 2021. "Attack and defense in patent-based competition: A new paradigm of strategic decision-making in the era of the fourth industrial revolution," Technological Forecasting and Social Change, Elsevier, vol. 167(C).
    15. Anna Gerke & Geoff Dickson & Michel Desbordes & Stephen Gates, 2016. "Bouquets Are As Useful As Brickbats: The Influence Of Interorganizational Citizenship Behaviors On The Innovation Process," Post-Print hal-01337018, HAL.
    16. Obradović, Tena & Vlačić, Božidar & Dabić, Marina, 2021. "Open innovation in the manufacturing industry: A review and research agenda," Technovation, Elsevier, vol. 102(C).
    17. Mario Barchi & Marco Greco, 2018. "Negotiation in Open Innovation: A Literature Review," Group Decision and Negotiation, Springer, vol. 27(3), pages 343-374, June.
    18. Karen Ruckman & Ian McCarthy, 2017. "Why do some patents get licensed while others do not?," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 26(4), pages 667-688.
    19. Lo Nigro, Giovanna, 2016. "The effect of early or late R&D inbound alliance on innovation," Journal of Business Research, Elsevier, vol. 69(5), pages 1791-1795.
    20. Lopes, Ana Paula Vilas Boas Viveiros & de Carvalho, Marly Monteiro, 2018. "Evolution of the open innovation paradigm: Towards a contingent conceptual model," Technological Forecasting and Social Change, Elsevier, vol. 132(C), pages 284-298.
    21. Wield, David & Tait, Joyce & Chataway, Joanna & Mittra, James & Mastroeni, Michele, 2017. "Conceptualising and practising multiple knowledge interactions in the life sciences," Technological Forecasting and Social Change, Elsevier, vol. 116(C), pages 308-315.
    22. Emma L. Hitchen & Petra A. Nylund & Eric Viardot, 2017. "The Effectiveness Of Open Innovation: Do Size And Performance Of Open Innovation Groups Matter?," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 21(03), pages 1-24, April.
    23. Takaya Kubota & Shin’ya Okuda, 2023. "Allocation of decision rights among two parties with asymmetric bargaining powers in bidirectional open innovation," SN Business & Economics, Springer, vol. 3(6), pages 1-17, June.
    24. Claudio Panico, 2017. "Strategic interaction in alliances," Strategic Management Journal, Wiley Blackwell, vol. 38(8), pages 1646-1667, August.
    25. Sengupta, Abhijit & Sena, Vania, 2020. "Impact of open innovation on industries and firms – A dynamic complex systems view," Technological Forecasting and Social Change, Elsevier, vol. 159(C).

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