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

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  • 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.

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  • 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
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    3. Nicolas Jullien & Jean-Benoît Zimmermann, 2011. "FLOSS in an industrial economics perspective," Revue d'économie industrielle, De Boeck Université, vol. 0(4), pages 39-64.
    4. Chiara Franco & Alberto Marzucchi & Sandro Montresor, 2012. "Absorptive capacity, innovation cooperation and human-capital. Evidence from 3 European countries," JRC Working Papers JRC77090, Joint Research Centre (Seville site).
    5. Popa, Simona & Soto-Acosta, Pedro & Martinez-Conesa, Isabel, 2017. "Antecedents, moderators, and outcomes of innovation climate and open innovation: An empirical study in SMEs," Technological Forecasting and Social Change, Elsevier, vol. 118(C), pages 134-142.
    6. Michael Fritsch & Sebastian von Engelhardt, 2010. "Who Starts with Open Source? Institutional Choice of Start-Ups in the German ICT Sector," Jena Economic Research Papers 2010-049, Friedrich-Schiller-University Jena.
    7. Andreas Braun & Laura Bockelmann, 2016. "An Individual Perspective On Open Innovation Capabilities In The Context Of Haute Cuisine," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 20(01), pages 1-24, January.
    8. Sebastian von Engelhardt, 2010. "Quality Competition or Quality Cooperation? License-Type and the Strategic Nature of Open Source vs. Closed Source Business Models," Jena Economic Research Papers 2010-034, Friedrich-Schiller-University Jena.
    9. Olesya Dudnik & Marina Vasiljeva & Nikolay Kuznetsov & Marina Podzorova & Irina Nikolaeva & Larisa Vatutina & Ekaterina Khomenko & Marina Ivleva, 2021. "Trends, Impacts, and Prospects for Implementing Artificial Intelligence Technologies in the Energy Industry: The Implication of Open Innovation," JOItmC, MDPI, vol. 7(2), pages 1-27, June.
    10. Child, John & Hsieh, Linda H.Y., 2014. "Decision mode, information and network attachment in the internationalization of SMEs: A configurational and contingency analysis," Journal of World Business, Elsevier, vol. 49(4), pages 598-610.
    11. Colombo, Massimo G. & Piva, Evila & Rossi-Lamastra, Cristina, 2014. "Open innovation and within-industry diversification in small and medium enterprises: The case of open source software firms," Research Policy, Elsevier, vol. 43(5), pages 891-902.
    12. Heikkinen, I.T.S. & Savin, H. & Partanen, J. & Seppälä, J. & Pearce, J.M., 2020. "Towards national policy for open source hardware research: The case of Finland," Technological Forecasting and Social Change, Elsevier, vol. 155(C).
    13. Selma Leticia Capinzaiki Ottonicar & Paloma Marin Arraiza & Fabiano Armellini, 2020. "Opening Science and Innovation: Opportunities for Emerging Economies," Foresight and STI Governance (Foresight-Russia till No. 3/2015), National Research University Higher School of Economics, vol. 14(4), pages 95-111.
    14. Federico Moretti, 2019. "“Open” Lab? Studying the Implementation of Open Innovation Practices in a University Laboratory," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 16(01), pages 1-25, February.
    15. Adrián Kovács & Bart Looy & Bruno Cassiman, 2015. "Exploring the scope of open innovation: a bibliometric review of a decade of research," Scientometrics, Springer;Akadémiai Kiadó, vol. 104(3), pages 951-983, September.
    16. Effelsberg, Martin, 2011. "Wissenstransfer in Innovationskooperationen: Ergebnisse einer Literaturstudie zur "Absorptive Capacity"," Arbeitspapiere 107, University of Münster, Institute for Cooperatives.
    17. Radnejad, Amir Bahman & Vredenburg, Harrie & Woiceshyn, Jaana, 2017. "Meta-organizing for open innovation under environmental and social pressures in the oil industry," Technovation, Elsevier, vol. 66, pages 14-27.
    18. Yongseok Jang, 2019. "Entreprenurial Human Capital and Inward Technology Licensing in the Context of New Technology-Based Firms," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 16(07), pages 1-20, November.
    19. 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.
    20. M. Muzamil Naqshbandi, 2018. "Organizational Characteristics and Engagement in Open Innovation: Is There a Link?," Global Business Review, International Management Institute, vol. 19(3_suppl), pages 1-20, June.
    21. Anna-Leena Asikainen & Giovanni Mangiarotti, 2017. "Open innovation and growth in IT sector," Service Business, Springer;Pan-Pacific Business Association, vol. 11(1), pages 45-68, March.
    22. Barrena-Martínez, Jesús & Cricelli, Livio & Ferrándiz, Esther & Greco, Marco & Grimaldi, Michele, 2020. "Joint forces: Towards an integration of intellectual capital theory and the open innovation paradigm," Journal of Business Research, Elsevier, vol. 112(C), pages 261-270.

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