The Two Faces of Open Innovation: NetworkExternalities and Learning
AbstractIn this paper I differentiate between two types of benefits of open innova- tion. Network externalities e¤ect happens when open innovation increases the participation of one group of users which increases the value of adoption for another group of users. Learning e¤ect happens when economic actors increase their knowledge through access to external sources of knowledge. I investigate how each effect can be dominant depending on nature of products, by drawing upon previous research in product modularity. In addition I discuss the fac- tors which will strengthen or weaken the e¤ects of each dimension. The main variables which influence learning are, tacitness of knowledge, technological op- portunities, appropriability of knowledge and turbulence. Network externalities e¤ect can be strengthened by increased user innovation.
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Date of creation: 2008
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-01-03 (All new papers)
- NEP-INO-2009-01-03 (Innovation)
- NEP-IPR-2009-01-03 (Intellectual Property Rights)
- NEP-KNM-2009-01-03 (Knowledge Management & Knowledge Economy)
- NEP-NET-2009-01-03 (Network Economics)
- NEP-SOC-2009-01-03 (Social Norms & Social Capital)
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