Skip to main content

Challenges of open innovation: the paradox of firm investment in open-source software

Buy Article:

$51.00 plus tax (Refund Policy)

Abstract:

Open innovation is a powerful framework encompassing the generation, capture, and employment of intellectual property at the firm level. We identify three fundamental challenges for firms in applying the concept of open innovation: finding creative ways to exploit internal innovation, incorporating external innovation into internal development, and motivating outsiders to supply an ongoing stream of external innovations. This latter challenge involves a paradox, why would firms spend money on R&D efforts if the results of these efforts are available to rival firms? To explore these challenges, we examine the activity of firms in open-source software to support their innovation strategies. Firms involved in open-source software often make investments that will be shared with real and potential rivals. We identify four strategies firms employ – pooled R&D/product development, spinouts, selling complements and attracting donated complements – and discuss how they address the three key challenges of open innovation. We conclude with suggestions for how similar strategies may apply in other industries and offer some possible avenues for future research on open innovation.

Document Type: Research Article

DOI: https://doi.org/10.1111/j.1467-9310.2006.00436.x

Affiliations: 1: College of Business, San José State University, One Washington Square, San José, CA 95192-0070, USA , Email: Joel.West@sjsu.edu 2: College of Business, James Madison University, Harrisonburg, VA 22807, USA , Email: gallagsr@jmu.edu

Publication date: 2006-06-01

  • Access Key
  • Free content
  • Partial Free content
  • New content
  • Open access content
  • Partial Open access content
  • Subscribed content
  • Partial Subscribed content
  • Free trial content
Cookie Policy
X
Cookie Policy
Ingenta Connect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more