The inter-organizational context of open innovation

Open innovation is almost by definition related to the establishment of ties of innovatingfirms with other organizations. Companies are increasingly forced to team up with othercompanies to develop or absorb new technologies, commercialize new products or simply to stayin touch with the latest technological developments.Firms are working more and more as part of broader networks to create customer value.Those networks are based on the collaborative efforts of specialist companies each providingcomplementary intermediate goods and services. As Information and CommunicationTechnology (ICT) becomes a powerful technology, it allows those companies to be linked bysophisticated business-to-business information systems. But networking can also implycollaboration with other partners. The set of partners can be quite different depending on the goalan innovating company wants to realize: companies develop relations with universities andresearch labs to explore the technical and commercial potential of new technologies, theyestablish alliances with or acquire technology based start ups or set up networks with selectedsuppliers and customers to launch radically new products or services based on new technologiesor a new business model. Learning how to create and capture value when companies are highlydependent on each other is still an under-explored area in the network literature. Most firms areused to make decisions within their boundaries taking the external environment as an exogenousvariable or as an arena where firms compete with one another. But in networks value is co-produced: the total value created in the network depends directly on how well partners'objectives are aligned to each other and on the commitment of the partners to invest incomplementary assets (Teece, 1986; Moore 1991). Similarly, in developing systemictechnologies, the innovating company depends on the technological skills and commitment ofother companies. Most firms do not feel comfortable in these 'open' scenarios where the returnessentially depends on the partnering actors. The three chapters in this section analyze in greater detail how companies have to team upwith other actors in the business system and build inter-organizational networks to support openinnovation. But firms are not only embedded in their environment by inter-organizationalnetworks: they can be part of regionally bounded clusters of competitive firms which, in turn,

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