Systems and complexity

Managing knowledge assets for open innovation

Open innovation is a valuable approach to increasing the competitive value of organisations. It can be described as “combining internal and external ideas as well as internal and external paths to market to advance the development of new technologies.”

Previous studies have shown that firms shifting from closed innovation to open innovation are compelled to revise their knowledge management (KM) systems to facilitate the successful implementation of the open innovation approach. However, researchers have only recently started to pay attention to ad hoc KM practices to support the successful adoption of open innovation, and to date, open innovation has been only scantly examined through a KM lens.

A new paper1 sets out to address this by carrying out a systematic literature review to discuss and reconcile existing insights about the KM practices that favour the successful adoption of open innovation.

A keyword string search was conducted of papers published from 2003 onwards, and the subsequent application of inclusion criteria yielded 34 papers. Each paper was then allocated to a group with regard to three archetypes of open innovation processes referring to the directions of knowledge flows. Some articles referred to more than one open innovation process.

The three archetypes are:

  • Inbound open innovation process, which refers to the search for and acquisition of external knowledge.
  • Outbound open innovation process, which relates to disclosing or commercialising internal knowledge to third-party organisations.
  • Coupled open innovation process, which deals with the joint use of knowledge by different organisations to innovate.

Findings and research gaps

Inbound open innovation process

Findings:

  • KM has to integrate the internal knowledge base with external knowledge elements.
  • The primary role of managers is to shape an organisational culture that embraces collaboration opportunities and open innovation tools overcoming not-invented-here (NIH)2 and buy-in (BI)3 syndromes.
  • The identification of problems to outsource requires an effective involvement of internal resources.
  • Some analysed methods previewed include relying on respected scientists, a new reward system, and an interactive guide to making decisions.
  • Absorptive capacity is enhanced by intellectual property (IP) management staff having an independent organisational unit, dedicated roles, and supporting ICT systems.
  • The choice of external sources depends on the focal firms’ strategy orientation.
  • Access to and absorption of scientific knowledge are particularly challenging.
  • Tacit knowledge is accessed and transferred by using rich media, by adopting ICT technologies, and by establishing alliances.
  • The option to buy external knowledge (by using crowdsourcing platforms) increases the potential novelty of solutions.

Research gaps:

  • Lack of research on KM practices and tools to integrate the acquired knowledge with internal existing knowledge.
  • It remains unclear if firm-specific characteristics and sectoral effects influence the KM practices to implement.
  • Lack of research on KM practices that sustain the decision making process about issues to outsource within small and medium enterprises (SMEs).
  • Lack of research on the role played by the firm’s governance systems (e.g., private, family-owned, public, etc.) on KM practices.
  • Lack of research on the KM practices in different IP regimes.
  • Lack of analysis of the role exerted by the economic logics and agents on the development of internal KM practices.
  • How internal KM systems have to relate with crowdsourcing platforms remain unclear.
  • Lack of research on the KM practices that should be implemented and/or adopted to select the external knowledge sources in the first place.
  • The elements of KM systems affecting the competitive advantage of a firm remain unclear.

Outbound open innovation process

Findings:

  • Desorptive capacity can be improved by systems of internal R&D outputs management (dedicated staff allocation, introduction of systematic tools for technology management, regular training).
  • It is necessary to have a tool to help organizations sustain the keep-or-sell decision (opportunity costs of selling vs. internally exploiting, strategic fit).

Research gaps:

  • Lack of research on KM practices to link the activity of the IP office with other internal offices/teams and the external actors.
  • Lack of research on criteria that KM systems have to follow to simplify customers’ choice.
  • Lack of distinction between KM practices to apply when focal firms directly sell knowledge and when firms participate in challenges on crowdsourcing platforms.
  • Lack of research on KM practices applied within industries where outbound open innovation processes are more frequent.

Coupled open innovation process

Findings:

  • Relative and connective capacities may alleviate problems related to the control over common knowledge.
  • Heterogeneity among companies requires greater absorptive capacity, more established governance forms, and networked approaches to open innovation to better manage common knowledge.
  • IT tools are of relevant importance to manage knowledge shared among diverse firms.
  • Effective IP mechanisms are needed to manage shared knowledge.

Research gaps:

  • Lack of research on whether KM practices for managing common knowledge change with regard to the types of knowledge shared (radical, incremental, complex, tacit, etc.).
  • Lack of research on how to make employees willing to engage in coupled open innovation processes.
  • Lack of research on the governance structures and incentives that might better support the co-development, the management and the dissemination of knowledge among member firms.
  • Lack of research on the IP tools that should be adopted in coupled open innovation processes.
  • Lack of research on the contingencies that may favour the use of an IP tool instead of another (e.g., sector, firm size, position in the value chain, etc.).

Reference and notes:

  1. Natalicchio, A., Ardito, L., Savino, T., & Albino, V. (2017). Managing knowledge assets for open innovation: A systematic literature review. Journal of Knowledge Management, (just-accepted).
  2. Not-invented-here (NIH) syndrome reflects a negative attitude of firms’ employees towards external knowledge, which may generate difficulties in the acquisition process, even though the external knowledge may be useful for the company, and in its use in innovation activities.
  3. Buy-in (BI) syndrome reflects a too positive attitude towards the acquisition of external knowledge. This makes firms not care about the real economic value of external knowledge.

Also published on Medium.

Bruce Boyes

Bruce Boyes (www.bruceboyes.info) is editor, lead writer, and a director of the award-winning RealKM Magazine (www.realkm.com), and a knowledge management (KM), environmental management, and project management consultant. He holds a Master of Environmental Management with Distinction, and his expertise and experience includes knowledge management (KM), environmental management, project management, stakeholder engagement, teaching and training, communications, research, and writing and editing. With a demonstrated ability to identify and implement innovative solutions to social and ecological complexity, Bruce's many career highlights include establishing RealKM Magazine as an award-winning resource, using agile and knowledge management approaches to oversee an award-winning $77.4 million western Sydney river recovery program, leading a knowledge strategy process for Australia's 56 natural resource management (NRM) regional organisations, pioneering collaborative learning and governance approaches to support the sustainable management of landscapes and catchments, and initiating and teaching two new knowledge management subjects at Shanxi University in China.

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