IDEAS home Printed from https://ideas.repec.org/a/eee/respol/v39y2010i3p351-359.html
   My bibliography  Save this article

Applying open innovation in business strategies: Evidence from Finnish software firms

Author

Listed:
  • Harison, Elad
  • Koski, Heli

Abstract

Our study aims at shedding light on the innovative business strategies in the software sector and understanding better the economics that underlies the supply of Open Source Software (OSS). We use survey data collected from 170 Finnish software companies to investigate how different properties of software firms, such as size, age, intellectual capital, absorptive capacity, and ownership structure affect their decisions to base their business strategies on OSS supply or proprietary distribution of products and services. Our empirical findings indicate that the adoption of technologically advanced strategies requiring complex legal and managerial knowledge, such as the OSS supply strategy, demands relatively highly educated employees. The support for and development of an education system providing highly skilled people from different fields are essential for the firms' successful adoption of innovative business strategies. We also find that market entrants have largely driven the OSS adoption, but there are no significant age-related differences in the adoption behavior of incumbent software firms.

Suggested Citation

  • Harison, Elad & Koski, Heli, 2010. "Applying open innovation in business strategies: Evidence from Finnish software firms," Research Policy, Elsevier, vol. 39(3), pages 351-359, April.
    • Handle: RePEc:eee:respol:v:39:y:2010:i:3:p:351-359
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0048-7333(10)00022-3
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Giampaolo Garzarelli & Roberto Galoppini, 2003. "Capability Coordination in Modular Organization: Voluntary FS/OSS Production and the Case of Debian GNU/Linux," Industrial Organization 0312005, University Library of Munich, Germany.
    2. Jean-Jacques Laffont & Patrick Rey & Jean Tirole, 1998. "Network Competition: I. Overview and Nondiscriminatory Pricing," RAND Journal of Economics, The RAND Corporation, vol. 29(1), pages 1-37, Spring.
    3. Maureen Mckelvey, 2001. "The Economic Dynamics Of Software: Three Competing Business Models Exemplified Through Microsoft, Netscape And Linux," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 10(2-3), pages 199-236.
    4. Farrell, Joseph & Saloner, Garth, 1992. "Converters, Compatibility, and the Control of Interfaces," Journal of Industrial Economics, Wiley Blackwell, vol. 40(1), pages 9-35, March.
    5. Hall, B.H., 1999. "Innovation and Market Value," Economics Papers 1999-w3, Economics Group, Nuffield College, University of Oxford.
    6. West, Joel, 2003. "How open is open enough?: Melding proprietary and open source platform strategies," Research Policy, Elsevier, vol. 32(7), pages 1259-1285, July.
    7. Dalle, Jean-Michel & Jullien, Nicolas, 2003. "'Libre' software: turning fads into institutions?," Research Policy, Elsevier, vol. 32(1), pages 1-11, January.
    8. Arthur, W Brian, 1989. "Competing Technologies, Increasing Returns, and Lock-In by Historical Events," Economic Journal, Royal Economic Society, vol. 99(394), pages 116-131, March.
    9. Cowan, Robin & Harison, Elad, 2001. "Protecting the digital endeavour: prospects for intellectual property rights in the information society," Research Memorandum 027, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
    10. Elad Harison & Robin Cowan, 2004. "On substitution of intellectual property and free disclosure: an analysis of R&D strategies in software technologies," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 13(5), pages 477-487.
    11. Deborah Dougherty, 1992. "Interpretive Barriers to Successful Product Innovation in Large Firms," Organization Science, INFORMS, vol. 3(2), pages 179-202, May.
    12. Cowan, Robin, 1990. "Nuclear Power Reactors: A Study in Technological Lock-in," The Journal of Economic History, Cambridge University Press, vol. 50(3), pages 541-567, September.
    13. Dahlander, Linus & Magnusson, Mats G., 2005. "Relationships between open source software companies and communities: Observations from Nordic firms," Research Policy, Elsevier, vol. 34(4), pages 481-493, May.
    14. William S. Schulze & Michael H. Lubatkin & Richard N. Dino & Ann K. Buchholtz, 2001. "Agency Relationships in Family Firms: Theory and Evidence," Organization Science, INFORMS, vol. 12(2), pages 99-116, April.
    15. Chris Freeman & Luc Soete, 1997. "The Economics of Industrial Innovation, 3rd Edition," MIT Press Books, The MIT Press, edition 3, volume 1, number 0262061953, April.
    16. David, Paul A, 1985. "Clio and the Economics of QWERTY," American Economic Review, American Economic Association, vol. 75(2), pages 332-337, May.
    17. Cowan, Robin, 1991. "Tortoises and Hares: Choice among Technologies of Unknown Merit," Economic Journal, Royal Economic Society, vol. 101(407), pages 801-814, July.
    18. Michael D. Whinston, 2001. "Exclusivity and Tying in U.S. v. Microsoft: What We Know, and Don't Know," Journal of Economic Perspectives, American Economic Association, vol. 15(2), pages 63-80, Spring.
    19. Georg von Krogh & Eric von Hippel, 2006. "The Promise of Research on Open Source Software," Management Science, INFORMS, vol. 52(7), pages 975-983, July.
    20. Bonaccorsi, Andrea & Rossi, Cristina, 2003. "Why Open Source software can succeed," Research Policy, Elsevier, vol. 32(7), pages 1243-1258, July.
    21. Suzanne Scotchmer, 1991. "Standing on the Shoulders of Giants: Cumulative Research and the Patent Law," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 29-41, Winter.
    22. Nonaka, Ikujiro & Toyama, Ryoko & Nagata, Akiya, 2000. "A Firm as a Knowledge-Creating Entity: A New Perspective on the Theory of the Firm," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 9(1), pages 1-20, March.
    23. Andrea Bonaccorsi & Silvia Giannangeli & Cristina Rossi, 2006. "Entry Strategies Under Competing Standards: Hybrid Business Models in the Open Source Software Industry," Management Science, INFORMS, vol. 52(7), pages 1085-1098, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Harison, Elad & Koski, Heli, 2006. "Innovative Software Business Strategies: Evidence from Finnish Firms," Discussion Papers 1042, The Research Institute of the Finnish Economy.
    2. Stam, Wouter, 2009. "When does community participation enhance the performance of open source software companies?," Research Policy, Elsevier, vol. 38(8), pages 1288-1299, October.
    3. Gauguier, Jean-Jacques, 2009. "L’industrialisation de l’Open Source," Economics Thesis from University Paris Dauphine, Paris Dauphine University, number 123456789/4388 edited by Toledano, Joëlle.
    4. John Kemp & Ted Wilson, 1999. "Monetary Regime Transformation: The scramble to gold in the late nineteenth century," Review of Political Economy, Taylor & Francis Journals, vol. 11(2), pages 125-149.
    5. Zohal Hessami, 2016. "How Do Voters React to Complex Choices in a Direct Democracy? Evidence from Switzerland," Kyklos, Wiley Blackwell, vol. 69(2), pages 263-293, May.
    6. Murmann, Johann Peter & Frenken, Koen, 2006. "Toward a systematic framework for research on dominant designs, technological innovations, and industrial change," Research Policy, Elsevier, vol. 35(7), pages 925-952, September.
    7. Matteucci, Nicola, 2013. "Standards, IPR and digital TV convergence: theories and empirical evidence," MPRA Paper 59359, University Library of Munich, Germany, revised Oct 2013.
    8. Sheen S. Levine & Michael J. Prietula, 2014. "Open Collaboration for Innovation: Principles and Performance," Organization Science, INFORMS, vol. 25(5), pages 1414-1433, October.
    9. Albert Faber & Koen Frenken, 2008. "Models in evolutionary economics and environmental policy: Towards an evolutionary environmental economics," Innovation Studies Utrecht (ISU) working paper series 08-15, Utrecht University, Department of Innovation Studies, revised Apr 2008.
    10. Nicolas Jullien & Jean-Benoît Zimmermann, 2011. "Floss firms, users and communities: a viable match?," Journal of Innovation Economics, De Boeck Université, vol. 0(1), pages 31-53.
    11. A. Bassanini & G. Dosi, 1998. "Competing Technologies, International Diffusion and the Rate of Convergence to a Stable Market Structure," Working Papers ir98012, International Institute for Applied Systems Analysis.
    12. Timothy J. Foxon, 2014. "Technological lock-in and the role of innovation," Chapters, in: Giles Atkinson & Simon Dietz & Eric Neumayer & Matthew Agarwala (ed.), Handbook of Sustainable Development, chapter 20, pages 304-316, Edward Elgar Publishing.
    13. Chong Ju Choi & Jai-beom Kim & Tarek Eldomiaty, 2005. "The role of social conventions in the diffusion of open source software: Implications for service industries," The Service Industries Journal, Taylor & Francis Journals, vol. 25(6), pages 789-801, September.
    14. Karsten Wasiluk, 2015. "Path dependence and induced innovation," Working Paper Series of the Department of Economics, University of Konstanz 2015-22, Department of Economics, University of Konstanz.
    15. Georg von Krogh & Eric von Hippel, 2006. "The Promise of Research on Open Source Software," Management Science, INFORMS, vol. 52(7), pages 975-983, July.
    16. Stefano Colombo & Luca Grilli & Cristina Rossi-Lamastra, 2014. "Network Externalities, Incumbent’s Competitive Advantage and the Degree of Openness of Software Start-Ups," Computational Economics, Springer;Society for Computational Economics, vol. 44(2), pages 175-200, August.
    17. Rodolphe Durand & Robert M. Grant & Tammy L. Madsen & David P. McIntyre & Arati Srinivasan, 2017. "Networks, platforms, and strategy: Emerging views and next steps," Strategic Management Journal, Wiley Blackwell, vol. 38(1), pages 141-160, January.
    18. Riccardo Leoncini & Francesco Rentocchini & Giuseppe Vittucci Marzetti, 2008. "You Won the Battle. What about the War? A Model of Competition between Proprietary and Open Source Software," Department of Economics Working Papers 0811, Department of Economics, University of Trento, Italia.
    19. Witt, Ulrich, 1997. ""Lock-in" vs. "critical masses" -- Industrial change under network externalities," International Journal of Industrial Organization, Elsevier, vol. 15(6), pages 753-773, October.
    20. Choi, Young Back, 2008. "Path dependence and the Korean alphabet," Journal of Economic Behavior & Organization, Elsevier, vol. 65(2), pages 185-201, February.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:respol:v:39:y:2010:i:3:p:351-359. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/respol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.