Knowledge Arbitrage in Global Pharma: A Synthetic View of Absorptive Capacity and Open Innovation

This case study examines a global pharmaceutical company widely using open innovation (OI). Three main research questions are addressed: (1) what OI concepts are salient in their innovation portfolio?, (2) what OI concepts are used in the strategy formulation? and (3) what other concepts are present that augment OI? Interviews with 120 managers and archival documents were analyzed using thematic analysis. Two concepts prominent in the literature, (i) value capture models and (ii) technology evaluation criteria, were not present in this portfolio. By contrast, we found a focus on OI capability building, external information sharing and uncertain knowledge arbitrage in networks. Finally, we discuss these capabilities in relation to absorptive capacity, proposing a simple, but important bi-directional perspective to embrace OI.

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