Open innovation is a phenomenon in search of a theory. (Birkinshaw) Essay

Open innovation is a phenomenon in search of a theory. (Birkinshaw). Critically evaluate this statement, examining current aca - Essay Example Can open innovation be introduced at McDonalds at the fry cook level, or is it only feasible among people with Ph. Ds? Does every individual personality work with open innovation, or are some personality types more effective under closed system? Might open and closed be points on a continuum that should be shifted for different circumstances? Might there be hybrid approaches, such as beginning a project using open innovation and finishing it using closed? How can open innovation be balanced against the needs of management? Does open innovation reduce or increase transparency? Many of these questions have been answered only summarily, some not at all, and some might be in principle beyond the present ability to answer. Yet theory guides research just as research guides theory: Creating a theory of open innovation, however tentative and likely to change, could help to create hypotheses that could be tested, models that could be explored, and predictions that could be proven or disprove n. This paper advances a theory of open innovation that claims that open innovation is in fact a more specific case of a general balance between the costs and benefits of command and control, and that open innovation is from an organizational behavior and institutional theory perspective a shift to bottom-up practices; as such, it depends crucially on loyalty to the institution, involvement in decision-making, corporate culture, management avoiding chilling effects, and other factors. I identify open innovation as a solution to the intellectual property version of the tragedy of the commons problem and as the internal flipside of the open source movement. Open innovation will be defined for the purposes of this paper as â€Å"a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology† (Chesbrough, 2003). Open innovation involves firms creating institut ional practices to reap the benefits of internal innovation, such as with â€Å"innovation time† initiatives, and external innovation. Open innovation is in essence the model of most universities. Within the university system, a researcher's data is owned by the university and/or by the companies or stakeholders that funded or initiated the study, yet they also retain some copyright and control. The information is made publicly accessible, either subsidized to be free or for a nominal fee, so that research can be facilitated. Researchers have tremendous latitude to experiment and investigate down their own lines of inquiry. Open innovation, then, alongside the parallel but distinct concept of open source, is an attempt to replicate the intellectual output of the university and of similar institutions that allow information to be more freely created and disseminated. Albert (2008) points out how antithetical this is to many traditional notions of corporate capitalism: The assu mption made is that companies both reap 100% of the benefit of communal intellectual property yet retain 100% in-house, which are contradictory assumptions. In practice, firms are faced with a difficult dilemma. Both internally and externally, they must control access to their information to remain competitive and prevent competitors from harming them, yet doing so reduces the net amount of innovation. Innovation depends on cross-referencing. Knowledge doesn't occur in a vacuum: If someone looks at a problem and can't be sure what