Please cite this article as:
Chiaroni D., Toletti G., Chiesa V. (2016).
Building Absorptive Capacity for Inbound Open Innovation: the role of Knowledge Brokers
International Journal of Technology Marketing, vol. 11(4), pp. 382-398.
Building Absorptive Capacity for Inbound Open Innovation: the role of Knowledge Brokers
Abstract:
One of the key drivers of Open Innovation is the ability of a firm to exploit external sources of innovation to nurture its innovation processes. Actively searching the external environment, however, it is not enough if the firm lacks the competences to screen and select external technology and knowledge as well as to internalize them. The ability of a firm to absorb in practice the technology or knowledge once acquired is of paramount importance for a firm willing to become an Open Innovator. In this paper we investigate, through a three-years participant observation in a large multinational firm, the potential role of knowledge brokers to act as externally organized forms of absorptive capacity.
Keywords: Inbound Open Innovation, Absorptive Capacity, Knowledge
Brokers, Knowledge creation, Participant observation.
Introduction
One of the key drivers of Open Innovation is the ability of a firm to exploit external sources of innovation to nurture its innovation processes. Actively searching the external environment, however, it is not enough if the firm lacks the competences to screen and select external technology and knowledge as well as to internalize them. In other words Open Innovation, and more in particular the Inbound Open Innovation dimension, is closely related to the concept of absorptive capacity (Cohen and Levinthal, 1990), i.e. to the ability of the firm to properly assess and exploit internally the potential of new technologies or new knowledge acquired outside the boundaries of the firm.
The existence of a true market for technologies (Arora et al. 2001) where suppliers and buyers of innovative technological solutions operate is recorded by Chesbrough himself (2003) as one of the reason of the emergence of the new paradigm of Open Innovation. Suppliers of potentially new technological solutions are seen just as external sources of innovation, to be screened and assessed by a firm that wants to innovate not only basing on its internal R&D department. However, if we review
the innovation management literature, we find that the role these external actors could play in supporting the innovation process of established firms is significantly broader. Indeed, since the early work of Hargadon (1998) on “knowledge brokers”, it has been debated in literature the ability of actors external to the innovating firm to actively transfer knowledge, i.e. to strengthen the absorptive capacity of the innovating firm, rather than just linking sources and recipients of innovation. So far, this issue is rather neglected in the Open Innovation literature, where there are only a few contributions (Sousa, 2008, Spithoven et al., 2011) attempting to investigate the role of knowledge brokers in actively fostering knowledge exchange between an Open Innovator and an external source of innovation.
Starting from these premises, our research aims at covering this gap by investigating the causes of the lack of absorptive capacity leading companies to look for the support of external actors and the role of knowledge brokers as an external source of absorptive capacity. We address these issues by using a rich empirical basis collected through an Action Research that involved a big Italian Oil&Gas firm willing to adopt an Open Innovation approach for managing its projects in the renewable energy domain.
The results of the paper support the above statement about the need of further research on the role of knowledge brokers in Open Innovation and provide interesting insights on the characteristics and roles of a knowledge broker in the Open Innovation domain.
The rest of the paper is articulated as follows. Section two presents the literature review. Section three derives the research framework and describes the methodology. Section four presents the starting point of the project. Section five describes the case study presenting the Action Research cycles. Section six discusses at length the results. Finally, Section seven draws some conclusions.
2 Literature review
Open Innovation is the purposive use of inflows and outflows of knowledge to respectively accelerate internal innovation, and expand the markets for external use of innovation (Chesbrough, 2003). Further elaborating on this concept, Chesbrough et al. (2006), acknowledge two main dimensions of Open Innovation:
(i) “inbound open innovation”, entailing the opening up to, and the establishment of relationships with, external organizations for accessing their technical and scientific competences;
(ii) “outbound open innovation”, that is the practice of establishing relationships with external organizations aiming at commercially exploiting technological opportunities started (or eventually just further developed) within the boundaries of the firm.
The first dimension of the Open Innovation is by far the one mostly adopted by firm conforming to the “new innovation” management paradigm (Huizing, 2011). Chiaroni et al. (2010 and 2011) provide an explanation for this evidence suggesting that the exploration process of the external environment to find new and suitable sources of innovation is the first one started by firms willing to adopt Open Innovation as a mean to improve their innovative performance. However, as far as the dimension of Inbound Open Innovation is concerned, West and Bogers (2014) highlight that researchers mostly focused on understanding how to obtain innovations from external sources. There is a dearth of research on how to integrate these innovations into the firm’s processes and day-by-day routines.
West and Bogers (2014) recognize the importance of further investigating this issue, stating that one of the streams of research to look at is about absorptive capacity. In this respect, they further stress the claim of Vanhaverbeke et al. (2008): “on the one hand that Open Innovation is not possible without absorptive capacity as an internal capability of innovating companies, and that our understanding of absorptive capacity can be enriched by linking it to Open Innovation.”
The concept of “absorptive capacity”, firstly developed by Cohen and Levinthal (1990), is the ability to recognize the value of external knowledge, assimilate and exploit it for commercial purposes. More recently, Cassiman and Veugelers (2000) provide a more detailed definition of absorptive capacity by distinguishing two dimensions: (i) one that is related to the ability to identify the market where the needed technology or knowledge is made available and (ii) one that is related to the ability to absorb in practice the technology or knowledge once acquired.
The process of knowledge absorption, i.e. the second dimension of absorptive capacity, has been also debated in literature about social relational capital (Kogut & Zander, 1992). Indeed, the social context of the team, and the nature and quality of relationships among team members (Nahapiet & Ghoshal, 1998), are expected to have a critical influence on the team’s effectiveness in the integrating knowledge. Several studies (Subranamian and Youndt, 2005; Cabrera et al., 2006; Cabello-Medina et al., 2011) demonstrate that the role of social capital is of paramount
importance for supporting the innovation process, particularly when the innovation under development is radical in nature. Nevertheless, recent contributions (for example Aribi and Dupouët, 2015) point out that the role of organizational capital is as much as important, particularly when an innovation that is “new-to-the-world” is concerned.
As we are interested particularly in the role of external actors in supporting internal absorptive capacity we will focus our analysis on the organizational capital, i.e. on the processes, procedures and organizational routines put in place by a firm for supporting its innovation process. For such a firm willing to adopt the Inbound Open Innovation, mastering both dimensions of absorptive capacity is of paramount importance. Indeed, the access to knowledge belonging to different actors and domains is a key pre-requisite for any firm willing to conform to this new innovation management paradigm. The largest is the “breadth” of the network (Laursen and Salter, 2006; Dittrich and Duyster, 2007), i.e. the number and heterogeneity of the partners involved in the innovation processes, the highest is the chance of the firm to innovate. Moreover, Open Innovation does not merely require a firm to intensify its relationships with external sources of innovation. Rather, it involves the use of a business model as the cognitive device to absorb new ideas and technologies and to put them into practice within the boundaries of the firm (Chesbrough, 2006).
Extant contributions in the Open Innovation literature match the role of external actors (intermediaries and knowledge brokers) to the first dimension of absorptive capacity, i.e. the screening of external environment. Sousa (2008), among the firsts to raise this issue in the debate, discusses a case of a Portuguese firm that leveraged knowledge brokers to establish links between three types of knowledge: (i) the firm-specific knowledge (within the boundaries of the firm), (ii) the industry-specific knowledge (within the established network of the firm), and (iii) the public or scientific knowledge (outside the network of the firm but in related fields). Later in 2011, Spithoven et al. investigate the case of collective research centres, i.e. inter-firm organizations created by a number of SMEs to reach a scale large enough to develop the needed competences for exploiting effectively external knowledge. More recently, Billington and Davidson (2013) and Bakici et al. (2013) discuss the role of intermediaries in supporting the “coding” of external sources for an easier check of the relevant knowledge by the innovating firm.
The second dimension of absorptive capacity, i.e. the one dealing in practice with the knowledge exchange, is seen as the result of the adoption of effective tools and methods within the boundaries of the innovating firm. Burcharth et al. (2014) suggest to develop competence-building
programs for employees within the firm to improve their ability to deal with extra organizational knowledge transactions. Ooms et al. (2015), by studying large R&D departments of high tech firms, posit that the use of social media increases the receptivity of employees to external innovations.
We advance that the role of external actors can be broader and foster both dimensions of absorptive capacity for innovating firms. Indeed, the existence of these so-called externally organized forms of absorptive capacity was initially cited also by Cohen and Levinthal (1990), but with a number of concerns about their ability to effectively realize inside a firm the potential of a technology acquired from an external source.
In the innovation management literature we find that this role of externally organized forms of absorptive capacity can be played by “knowledge brokers” (Hargadon, 1998) or “bridges for innovation” (Bessant and Howard, 1995). Three major features seem to be at the roots of this “brokering capability” (Muller and Zenker, 2001) that fit with the concept of externally organized forms of absorptive capacity:
(i) The knowledge-intensity that gives knowledge brokers the capacity to understand and manipulate complex technologies, and that is a pre-requisite for effectively acquiring, generating, recombining and diffusing technological competencies;
(ii) The function of consulting, that is critical for favouring an effective and efficient absorption of the transferred knowledge by the recipient organization;
(iii) The strongly interactive or client-related character of brokering activity, to stimulate the integration of the transferred knowledge into the recipient organization’s innovation process. Hargadon (2002) goes further by defining five basic activities for knowledge brokers (access, bridging, learning, linking, and building), where the role of “recombining” existing knowledge and build new one is even more stressed.
Further attention is therefore deserved in understanding the potential of knowledge brokers of enriching our knowledge about how firms willing to adopt Open Innovation face the problem of creating absorptive capacity.
3 Research Framework and Methodology
According to these premises, the paper aims at answering to two research questions:
1. What can be the causes of the lack of absorptive capacity that can lead companies to look for the help of external actors
and
2. whether and how knowledge brokers can play the role of an externally organized form of absorptive capacity, i.e. provide an alternative way to internal competences for firms needing absorptive capacity to manage an Inbound Open Innovation project.
In order to answer to these questions we have conducted an Action Research (Westbrook, 1995; Coughlan and Coghlan, 2002) in a large multinational firm based in Italy and operating in the rather mature Oil&Gas industry.
It is worth mentioning that the Company has several characteristics of interest for the study:
(i) it has a large internal R&D centre performing a variety of Oil&Gas related research, from basic research to industrial projects;
(ii) it has a strong R&D network involving both other players of this industry, but also several Universities and research centres both in Italy and at worldwide level.
Action Research is an appropriate approach to such study because it deals with real-world problems and requires the presence of the researchers.
What made it possible is the fact that our project team has been purposively hired by the Company (i.e. by the owner of the Open Innovation project under scrutiny) to help solving the emerging issue of lack of absorptive capacity. Hence, we have been directly involved in the project as members of the project team. More in particular, one of us has been the team leader of the group of researchers of our University participating to the project.
In order to understand specifically the role of knowledge brokers, we have purposively designed a research framework by adapting the extant and well-known model of Hargadon (2002) about knowledge brokers to the peculiarities of the Open Innovation domain.
In his most recent work on knowledge brokers, Hargadon (2002) defines five steps for describing the activity of knowledge brokers:
(i) access, i.e. the mere presence of a number of knowledge domains that can be addressed by knowledge brokers;
(ii) bridging, i.e. the activity of identifying the needed knowledge also by bringing an idea or artefact that has been developed in one domain to be valued in others;
(iii) learning, i.e. the activity of understanding the solutions and problems that exist in a given domain, even beyond the given idea or artefact under analysis;
(iv)linking, i.e. the activity of actively matching learning from different knowledge domains to solve a given issue;
(v) building, i.e. the activity of creating new knowledge and embedding it into proposed solutions for customers.
It appears clear that activities (i) and (ii) are related with the simple creation of “linkages” between actors potentially belonging to different networks. In this respect, these activities in practice support the screening and scouting of potential external sources of innovation, without any intervention on the knowledge exchange in itself.
Activity (iii) implies a direct contribution of the knowledge broker to the innovation process, by performing a value added knowledge recombination, whereas activities (iv) and (v) entail a deeper understanding of the problem and the creation of new knowledge for supporting the customer. These activities, therefore, have a direct effect on the knowledge exchange between the innovating firm and the external sources of innovation.
For the purpose of the paper, we adapted the Hargadon (2002) by highlighting three core activities potentially performed by a knowledge broker (please see also Figure 1).
PLEASE INSERT FIGURE 1 ABOUT HERE The three core activities can be described as follows:
Linking, if the knowledge broker performs an “access” and “bridging” activities by putting the innovating firm in contact with external actors able to play a role as potential sources of innovation;
Knowledge recombination, if the knowledge broker performs a “learning” activity by valuably integrating different sources of knowledge and offering to the customer the knowledge required to face its needs in the innovation process;
Knowledge creation, if the knowledge broker performs the “linking” (and eventually also the “building”) activity by elaborating and adapting on its own the acquired knowledge to propose a solution to the needs of the customer firm.
If the knowledge broker is performing a “linking” activity, i.e. it limits its contribution to the innovation process of the customer firm to the creation of a “link” between previously independent networks, it certainly
plays a role but we posit it does not affect the absorptive capacity of the firm. More in particular, it does not affect the second dimension of the absorptive capacity (as defined by Cassiman and Veugelers, 2000), i.e. the actual absorption process of the acquired knowledge
The Linking activity is directly related to the number and characteristics of external sources that can be addressed by the knowledge broker. Potential sources of innovation can be firms, universities and research centres, public entities, and, broadly speaking, any potential source of knowledge.
If the knowledge broker performs a Knowledge recombination or Knowledge creation activity, we posit it can act as an externally organized form (Cohen and Levinthal, 1990) of absorptive capacity. Indeed, in these cases, the knowledge broker improves in practice the ability of the customer firm to exploit the external sources by transforming (Knowledge recombination) or even adding new knowledge (Knowledge creation) to the acquired knowledge and fostering its absorption by the innovating firm. The above-mentioned relationship between the customer firm and the knowledge broker is far from being a simple supply of a solution to the innovation problems of the customer firm. Indeed, it involves a process of cross-fertilisation and knowledge exchange between the two actors that modifies and improves the knowledge innovation management competences within the company (Armistead, 1999; Winch and Courtney, 2007). In this respect, its effects last also beyond the formal end of the relationship.
This stays also coherent with the Open Innovation literature, where for example Lee et al. (2010) found that an intermediated innovation process is improving the potential for Open Innovation of SMEs.
The Knowledge recombination and Knowledge creation activity is directly related, other than to the number and characteristics of external sources that can be addressed by the knowledge broker, to the ability of the knowledge broker to conduct by itself internal R&D activities. There is a potential complementarity between the “breath” of the network accessed and the internal R&D capabilities of the knowledge broker.
We used this purposively developed framework to investigate the role of knowledge brokers in Open Innovation through a qualitative methodology. We followed the traditional Action Research approach with a four-step Action Research cycle: Diagnosing, Planning Action, Taking Action and Evaluating Action (see Figure 2).
The project lasted 3 years between 2011 and 2013. During this time two Action Research Cycles have been conducted and several activities have been done in order to achieve the aims of this project deepening our understanding of the issues under investigation:
data about team members and their interactions with the external actors involved have been collected longitudinally;
archival material about the companies involved has been studied; official documents and presentations, internal memos, press
releases and press articles about the project have been collected and analyzed;
fifteen semi-structured interviews have been performed with key informants (in particular with project managers and team members in the Company and in the partnering organizations involved in the project) to fine tune and check the longitudinal reconstruction of what happened presented in this paper.
4 Case discussion: the starting point
The Company has been traditionally the leader of the Italian market and one of the top 10 Oil&Gas companies for market capitalization at global level. However, the evolution of the industry compelled the Company to look at new possible sources of energy and at evaluating a possible diversification of its portfolio. To this aim, in the mid of 2010, it decided to launch a project aimed at diversifying its product portfolio looking to renewable energies and more in particular to solar plants. Using the words of the Head of the R&D Department at the Company “When we
launch a new product we always want to be innovative. We do not like just to go on the market and buy existing products or technologies; we want to develop something new with our own brand”. Since the beginning,
entering in the renewable energies domain, was considered rather challenging due to the lack of specific knowledge about enabling technologies and markets dynamics. Consequently, the Company decided to run this project accordingly to an Open Innovation approach, i.e. by involving a network of players with proven expertise in the field. The company decided that the R&D Department of the Company had to perform like a hub by coordinating the different efforts of the actors in the network, but most of the innovation had to come from external sources. However, the R&D Department was the sole responsible for the exploitation phase, i.e. for the practical deployment of the new solution
and its commercial development. The plan was rather ambitious: the CEO of the Company set the mid of 2011 as the moment to enter the market.
The network created for the purpose of the project was made by:
(i) a leading technological University in the US, with a dedicated Department for mechanical systems to be used in solar thermal plants;
(ii) a large Italian company with expertise in the field of energy storage for plants using solar thermal power;
(iii) a medium sized Italian company with expertise in the field of hydraulic actuators to be used for solar thermal plants;
(iv) a medium sized US company with expertise in the field of reflective coatings for solar thermal plants.
Only actor (ii) has been part of the suppliers of the Company since years, whereas actors (i), (iii) and (iv) have been approached by the Company for the first time during this project.
At the end of 2010, a new technological solution has been developed mostly by the US University and the other actors in the network have worked out the design of ancillary systems. Such solution was rather different from commercial alternatives as it was based on an entirely different concept, but it was still far from being expendable on the market. In the words of the Head of the Technical Development in the Company’s team: “We looked at the proposed solution. It was brilliant and
undoubtedly new … but there are still a lot of concerns about feasibility and we had no idea about the potential success on the market. We were not able to figure out a clear business plan for exploiting the solution”. In
that moment the project was close to abortion and was put in standby.
5 Case discussion: the AR cycles
After some months when the project was put in stand-by, in the mid of 2011, the Company decided to hire a consulting team of researchers from a large technical Italian University with an experience in the market assessment of new technologies in the renewable energies industries and we became involved in the project. The initial mandate of our team was clearly limited to the evaluation of the proposed solution. As the Head of the R&D Department at the Company said: “We are expecting a kind of
go, no-go decision based on the true potential of the proposed solution”. First AR cycle: Diagnosing
It was clear since the beginning that the Company was quite effective in identifying where the needed technology or knowledge was available (i.e. it performed quite well as far as the first dimension of absorptive
capacity is concerned), but it was not able to actually absorb the technology and to make it an integral part of its innovation process. Interestingly, as mentioned above, this was not due to a lack of competences. Scientists in the Company’s R&D labs had a wide set of competences in the needed field of material sciences, chemistry and also energy and mechanical engineering. Moreover, it was not due to a lack of investments, with a total budget exceeding 3 € millions and a strong commitment by the Company.
We think that the real nature of the problem can be clearly defined using the words of the Head of the R&D Unit that hired our team: “we
know this solution should work but we are not able to figure out how it should happen. This is quite upsetting as we invested a lot of money and we know we have on board among the best scientists in the field, not just considering those in our Company but also within our network”. It
seemed clear to us that this was a typical issue related to the lack of absorptive capacity. Indeed, the managers were not complaining about the external source of innovation, this excluding the Not Invented Here syndrome, neither they had issues in sharing technical requirements with the other parties involved. They missed the ability to put in practice in their business the solution developed, i.e. the second dimension of absorptive capacity.
No one in the network was able (or wanted to take the responsibility) to assess the market potential of the solution and to clear doubts about feasibility. To make things worst also the people in the R&D Department of the Company lacked a clear view about how to proceed with the project.
First AR cycle: Planning Action
After some research, the first answer of our team to the go, no-go question was positive (with some reservations) and we proposed to go on with the development of the solution. However, some concerns were raised about some details of the solution, particularly concerning the impact of certain mechanical parts on the investment costs and the expected efficiency (transformation of solar radiation in thermal energy) of the system. A detailed comparison with market data from commercial alternatives was provided to the Company suggesting ways to improve the new technology under development.
In order to better support the customer, our team suggested also to involve other two actors in the network:
(i) a small Italian company with a deep expertise in the modelling of mechanical systems for solar thermal plants (we thought that
a company able to speed up the process of evaluation of technical alternatives by providing an easy input-output model measuring the impacts on cost and efficiency could be quite useful);
(ii) the Department of mechanical engineering of an Italian University with a deep expertise in the design for assembly approach, because it emerged as a critical issue in our revision of the proposed solution.
First AR cycle: Taking Action
The Company agreed to involve these two actors and a new release of the proposed solution was set for the mid of 2012.
The network worked quite hard and well and in the spring of 2012 a revised solution was presented. A design for assembly approach was introduced in the development of the solution and a production process for the main components was firstly drafted, making the whole picture more clear and understandable by engineers in the Company.
First AR cycle: Evaluating Action
As a team member at the Company said: “We observed a big
improvement in the solution before the summer of 2012 and we were happy about it, but again there were concerns about how to exploit it commercially. Moreover, there were some technical issues where actors in the network had different positions and we appeared not to be able to take a decision. At the beginning, we gave the priority to the US University who firstly designed the solution, but the result was a clear dissatisfaction in the other actors of the network. Again, the project was
close to abortion.
Second AR cycle: Diagnosing
Even if the Company had the technical expertise to evaluate every single input from actors in the network, it clearly lacked the ability to assess the overall results and to coordinate the efforts of different actors. “At the heart of the problem, we are not sure about what to do: too many
alternatives and too many actors involved” (Head of the R&D Department
at the Company).
At the beginning of 2013, the Company decided to change the approach and to let our team to take temporarily the lead of the project, by coordinating and directly interacting with all the actors in the network. In a certain way, our team assumed the role of hub that was initially taught for the R&D Department of the Company.
Second AR cycle: Planning Action
First of all, a clear vision about the target market segment most suitable for the new technology was developed through an ad hoc market research conducted by our team. Then, our team redefined the tasks and the level of involvement of different actors in the network on the basis of the needs of the target market segment that has been identified. Finally, an economic model to assess the potential returns for investors in the new technology had been developed internally by our team and then shared with the Company.
Second AR cycle: Taking Action
Our team developed the economic model for evaluating the investments and helped the Company sizing the target markets and therefore creating a clear business case for the proposed solution. The other technical partners, in close collaboration with the Company, finalised the design, providing the specific requirements for each component and the final assembly procedure.
Second AR cycle: Evaluating Action
This time the reaction was definitively positive. In the words of the Head of the Technical Development in the Company’s team: “At the end
we were finally able to understand the value of the different inputs and to quickly evaluate project alternatives. Taking decisions and assuming responsibilities was easier”.
At the mid of 2013, the Company took over the full leadership of the project and solved the remaining issues for achieving the final design of the new technology. In the beginning of 2014, a dedicated budget was devoted to the construction of the full-scale prototype.
5 Main results
The research brings several results.
The lack of absorptive capacity in the recipient firm is clearly not related to a low level of R&D investments, nor to a lack of human capital in the R&D team, that are the common measures of absorptive capacity (see for example Escribano et al, 2009; and even more recent contributions like Flatten et al., 2011).
The recipient firm was able to identify the right actors to involve in the innovation process but lacked the actual ability to absorb the knowledge and to adapt internal decision processes to the new conditions.
In other words, it is the second dimension of the absorptive capacity, as defined by Cassiman and Veugelers (2000), the one the recipient firm did lack. The first dimension does not involve complex scientific or technological knowledge, but knowledge about the technology at user level and knowledge of business trends (Arbussa and Coenders, 2007), whereas the second dimension entails a deeper understanding of the technology/knowledge and the ability to take effective decisions over it.
This second dimension is related to the usage of the business model as a cognitive device for Open Innovation (Chesbrough, 2006). Therefore, it is clear that, when the recipient firm lacks this ability to absorb the external knowledge, the role of the knowledge broker in recombining and creating new knowledge that can be understood through the business model of the recipient company is of paramount importance to foster the success of an Open Innovation project.
As a consequence to catch situations like the one discussed in this paper we need a different operationalization of the concept of absorptive capacity, properly assessing the lack of the second dimension of absorptive capacity. We can argue, indeed, that the lack of absorptive capacity found in the case under investigation is better explained by looking at the cognitive distance (Nooteboom et al., 2005) between the domain when the firm usually operates and the domain of the project under development. On the relation between cognitive distance and innovation performance, Nooteboom (1992 and 1999) proposed that there is an inverted-U shaped relationship. At a certain point, cognitive distance becomes as large as to preclude sufficient mutual understanding needed to utilize opportunities for novel combinations of complementary resources.
In the case under investigation, this cognitive distance became a barrier when the team in the innovating firm was requested to take decisions about the project. The development by the knowledge broker of the economic tool was enough to reduce this cognitive distance and to let the team in the innovating firm establish the right relationships between the different inputs. Again, the Knowledge creation activity of the knowledge broker provided a mean to reduce cognitive distance by translating and presenting the original knowledge in a language more understandable by the recipient firm. In this respect, the internal capability of the knowledge broker to generate knowledge seems to gain the same relevance as the “breath” of the external network it is able to address.
Moreover, the empirical observation confirms that a knowledge broker can act as an externally organized form of absorptive capacity (see also Table 1). However, this is true only, as argued in the research framework, when the activities performed by the knowledge broker go beyond the “Linking” and intervene in the innovation process by recombining and creating knowledge. The first step of the involvement of our research team as knowledge broker was indeed not successful until we had the chance, starting from the beginning of 2013, to actively contribute to the project, by providing alternative solutions and evaluation procedures purposively developed leveraging our internal competences.
PLEASE INSERT TABLE 1 ABOUT HERE
It appears that knowledge brokers can be an alternative source of absorptive capacity for the recipient firm only when they deal with: (i) an internal generation of knowledge, (ii) a strong recombination and creation of knowledge and (iii) an effective knowledge exchange between various organizations (e.g. universities, governmental research centres, and private firms).
The internally generated knowledge is crucial for passing from a mere Linking, i.e. where the knowledge stemming from different sources is matched to ease the decision making process of the recipient firm, to a more value added Knowledge creation, i.e. where the knowledge is fully elaborated by the knowledge broker thus also supporting the decision making process.
These results are consistent with the ones found by Spithoven et al. (2011) investigating the relationship between collective research centres and SMEs and therefore represent a further evidence, against the scepticism of Cohen and Levinthal (1990) that externally organized forms of absorptive capacity may exist and being effective.
We can advance therefore that, when the knowledge broker performs a Knowledge creation activity it actually contributes to the absorptive capacity of the firm, more in details it tackles both the dimensions of absorptive capacity as defined by Cassiman and Veugelers (2000). Indeed, in this process the knowledge broker interacts with the customer firm by improving its knowledge and innovation management competences (Winch and Courtney, 2007).
Last, the fact that a knowledge broker can act as an externally organized form of absorptive capacity is of particular relevance in the Open Innovation domain. Firms implementing Open Innovation have to
undergo a continuous process of experimentation, adaptation and learning to define pro-actively their business environment. Consequently, an on purpose recombination of acquired knowledge is needed in order to support an Open Innovation approach and distinguish it from a traditional closed innovation process. The fact that this recombination and creation of knowledge can be effectively performed by a knowledge brokers shed new lights on the potential role of external actors constituting the market for technologies (Arora et al. 2001).
6 Conclusions
The results of the empirical investigation presented in this paper have significant implications both for researchers and for practitioners.
First, it is believed that the present research can benefit scholars in the field of knowledge brokers and Open Innovation. The former are encouraged to adopt the methodological approach and the framework suggested in the paper in order to investigate whether knowledge brokers act as externally organized forms of absorptive capacity for recipient firms. This would help to extend the present research’s results and advance the extant knowledge about the role played by knowledge brokers within an innovation system. n this point, the paper demonstrates common measures of absorptive capacity are unable to catch and to distinguish a lack of this specific dimension. Further research is therefore needed to improve our knowledge about this phenomenon.
Moreover, Open Innovation scholars might be pushed to investigate whether the access to external sources of knowledge can be successfully performed through knowledge brokers. More in particular, further research is needed to understand whether knowledge brokers, when performing a knowledge recombination and/or creation activity, may affect the retention knowledge process (Huizing, 2011) for firms adopting Open Innovation.
Scholars dealing with the topic of knowledge brokers can also investigate whether or not the potential substitution effect between the “breath” of the network and the internal R&D capabilities of the knowledge broker that we drafted in this paper can be found and supported at a more general level.
Finally, this paper pushes researchers willing to deal with the integration of external sources of innovation for Open Innovation to go beyond the common understanding of the role of intermediaries (Billington and Davidson, 2013), by looking at their contribution to the absorptive capacity of the innovating firm (West and Bogers, 2014).
For managers in the innovation field, we believe the paper provides a framework that enlightens how to deal with knowledge brokers, suggesting alternative ways to manage Open Innovation projects.
The paper has obviously some limitations. A number of factors (e.g., cultural barriers, linguistic barriers …) were not completely controlled during the participant observation. A replication of the study in different contexts where, for example, cultural and linguistic barriers are not in place would contribute to generalize our results. Another interesting factor to control is the trust between the firm and the knowledge broker that could be also related to the number of interactions they had in the past. Further research is therefore needed to define the complex role knowledge brokers play in the Open Innovation domain.
References
Arbussa, A., and Coenders, G., 2007, Innovation activities, use of appropriation instruments and absorptive capacity: Evidence from Spanish firms, Research Policy, 36(10): 1545-1558.
Aribi, A., Dupouët, O., 2015, The Role of Organizational and Social Capital in the Firm's Absorptive Capacity, Journal of Knowledge Management, 19(5)
Armistead, C., 1999, Knowledge management and process performance, Journal of Knowledge Management, 3(2), 143-157.
Arora, A., Fosfuri, A., & Gambardella, A., 2001, Markets for technology and their implications for corporate strategy, Industrial and corporate change, 10(2), 419-451.
Bakici, T., Almirall, E., Wareham, J., 2013, The role of public open innovation intermediaries in local government and the public sector, Technology Analysis and Strategic Management, 25(3): 311-327.
Becker, HS., and Geer, B., 1957, Participant Observation and Interviewing: A Comparison, Human Organization, 16: 28-32.
Bessant, J., and Howard, R., 1995, Building bridges for innovation: the role of consultants in technology transfer, Research Policy, 24(1): 97-114.
Billington, C., Davidson, R., 2013, Leveraging open innovation using intermediary networks, Production and Operations Management, 22(6): 1464-1477.
Cabrera, A., Collins, W.C., Salgado, J.F., 2006, Determinants of individual engagement in knowledge sharing, The International Journal of Human Resource Management, 17(2), 245-264.
Cassiman, B., and Veugelers, R., 2000, External technology sources: Embodied or disembodied technology acquisition, Economics Working
Papers 444, Department of Economics and Business, Universitat Pompeu Fabra.
Chesbrough, H., 2003, Open Innovation: the new imperative for creating and profiting from technology, Harvard Business School Press, Boston.
Chesbrough, H., 2006, Open Business Models: How to Thrive in the New Innovation Landscape, Harvard Business School Press, Boston.
Chiaroni, D., Chiesa, V., Frattini, F., 2010, Unravelling the process from closed to open innovation: evidence from mature, asset-intensive industries, R&D Management, 40(3): 222–245.
Chiaroni, D., Chiesa, V., Frattini, F., 2011, The Open Innovation Journey: how firms dynamically implement the emerging innovation management paradigm, Technovation, 31(1): 34-43.
Cohen, M.V., Levinthal, D.A., Absorptive capacity: a new perspective on learning and innovation, Administrative Science Quaraterly, 35: 128-152.
Coughlan, P., Coghlan, D., 2002, Action research for operations management, International Journal of Operations & Production Management, 22(2): 220-240.
Dittrich, K., and Duyster, G., 2007, Networking as a means to strategy change: the case of Open Innovation in mobile telephony, Journal of Product Innovation Management, 24(6): 510-521.
Enkel, E., Gassmann, O., Chesbrough, H., 2010, The Future of Open Innovation, R&D Management, 40(3): 213-221.
Escribano, A., Fosfuri, A., and Tribó, J. A., 2009, Managing external knowledge flows: The moderating role of absorptive capacity, Research Policy, 38(1): 96-105.
Flatten, T.C., Engelen, A., Zahara, S., Brettel, M., 2011, A measure of absorptive capacity: Scale development and validation, European Management Journal, 29(2), 98.116.
Gassmann, O., and Enkel, E., 2004, Towards a theory of Open Innovation: Three Core Process Archetypes, R&D Management Conference, Lisbon, Portugal.
Hargadon, A.B., 1998, Firms as knowledge brokers, California management review, 40(3):209-227.
Hargadon, A.B., 2002, Brokering knowledge: Linking learning and innovation, Research in Organizational behavior, 24: 41–85.
Huizingh, E. K.R.E., 2011, Open innovation: State of the art and future perspectives, Technovation, 31(1): 2–9.
Kogut, B., Zander, U., 1992,Knowledge of the firm, combinative capabilities, and the replication of technology, Organization Science, 3, 383-397.
Laursen, K., and Salter, A., 2006, Open for innovation: the role of openness in explaining innovation performance among UK manufacturing firms, Strategic Management Journal, 27: 131-150.
Lee, S., Park, G., Yoon, B., Park, J., 2010, Open innovation in SMEs— An intermediated network model, Research Policy, 39(2), 290-300.
Marshak, R.J., 1993, Managing the metaphors of change, Organizational Dynamics, 22(1): 44–56.
Muller, E., and Zenker, A., 2001, Business services as actors of knowledge transformation: the role of KIBS in regional and national innovation systems, Research policy, 30(9): 1501-1516.
Nahapiet, J., Ghoshal, S., 1998, Social capital, intellectual capital, and the organizational advantage, Academy of Management Review, 23(2), 242-266
Nooteboom, B., 1992, Towards a dynamic theory of transactions, Journal of Evolutionary Economics, 2: 281–299.
Nooteboom, B., 1999, Inter-firm Alliances: Analysis and Design, Routledge, London.
Noteboom, B., Vanhaverbeke, W., Duysters, G.M., Gilsing, V.A., van den Oord, A., 2005, Optimal cognitive distance and absorptive capacity, ECIS working paper 06-01.
Ooms, W., Bell, J., Kok R.A.W., 2015, Use of social media in inbound open innovation: building capabilities for absorptive capacity, Creativity and Innovation Management, 24(1): 136-150.
Pérez-Luño, A., Cabello-Medina, C., Carmona Lavado, A., Cuevas Rodriguez, G., 2011, How social capital and knowledge affect innovation, Journal of Business Research, 64(2), 1369–1376.
Sousa, M., 2008, Open innovation models and the role of knowledge brokers, Inside Knowledge.
Spithoven, A., Clarysse, B., Knockaert. M., 2011, Building absorptive capacity to organize inbound open innovation in traditional industries, Technovation, 30(2): 130-141.
Subramanian, M., Youndt, M.A., 2005, The Influence of Intellectual Capital on the Types of Innovative Capabilities, Academy of Management Journal, 48(3), 450-463.
Vanhaverbeke, W., Van de Vrande, V., Cloodt, M., 2008, Connecting Absorptive Capacity and Open Innovation, available at SSRN: http://ssrn.com/abstract=1091265
West, J., Bogers, M., 2014, Leveraging external sources of innovation: a review of research on open innovation, Journal of Product Innovation Management, 31(4): 814-831.
Westbrook, R., 1995, Action research: a new paradigm for research in production and operations management, Journal of Operations and Production Management, 15(12): 6-20.
Winch, G.M., Courtney, R., 2007, The Organization of Innovation Brokers: An International Review, Technology Analysis & Strategic Management, 19(6), 747-763.
Figure 2 The Action Research cycle.
Diagnosing
Taking Action
Planning Action
Evaluating Action
Activity performed by the knowledge broker Time
period Characteristics Contribution to the absorptive capacity of the recipient firm Status of the project Linking Beginnin g of 2011 / Mid 2012 Performing an independent evaluation on the feasibility of the proposed solution and suggesting new partners to cover gaps in required knowledge to run the project. The firm directly manages partners. Limited to the first dimension of scouting of external sources of innovation. Project close to abortion Knowledg e creation Beginning of 2013 / Mid 2013 Developing a decision making tool for evaluating different inputs and coordinating the efforts of partners in the network. Focused on the second dimension of actual absorption and integration of knowledge. Project on going and speeded up Knowledg e recombina tion Mid 2013
/ 2014 Supporting the innovating firm in matching different inputs and solving problems. The knowledge broker together with the firm manages partners. Kept focused on the second dimension of actual absorption and integration of knowledge. Project on going and full-scale prototyp e under construct ion.
