Mitigation of Knowledge Risks in Open Innovation

In recent times, open innovation (OI), which involves collaboration with business partners and utilization of open resources in outside environment, is gaining popularity and importance in small and medium-sized enterprises (SMEs). While OI offers many advantages, SMEs need to be aware that they may expose their hard-earned knowledge, expertise, or other valuable knowledge assets to others when participating in sharing and co-developing knowledge. They must first understand the status and characteristics of their knowledge assets and then assess their readiness to enter OI. The chapter therefore introduces the Culture Space (C-Space model) for SMEs to use to organize and classify their total knowledge with the aim to identify what can be shared and what must be protected during OI. The chapter moves on to explain that when knowledge is not managed well, problems, threats, or dangers, referred to as knowledge risk, may arise and offset the advantage that can be gained from OI. The chapter describes four common types of knowledge risk and shows how to assess them individually. It also suggests how to mitigate these risks. Finally, a case study done in China is presented to illustrate the knowledge risk assessment and mitigation.