Research in Innovation Management

Scholars have recently argued that startups and incumbents play differential roles in the disruptive transformations of industries toward sustainability and that the transformations are only likely to succeed if both startups and incumbents contribute. To understand their respective contributions and, thus, to understand how industries make the transition toward sustainability, comparative studies of incumbents versus startups during this transformation have been identified as a central pursuit, but yet they are mostly lacking. Since business models have become a principal way of characterizing firms, the present study takes a business model perspective and derives business model archetypes in the electrical power sector from an analysis of 280 startups and incumbents in three different countries. The selected countries (USA, UK, and India) represent three different energy profiles and leading instances of disruption in the energy sector. The article, then, undertakes a comparative analysis of startups and incumbents based on the empirically distilled business model archetypes and develops propositions on startups, incumbents, and business models in industry transformations. This analysis produces several important insights. First, incumbents do not seem to engage in less business model experimentation than startups. Second, incumbents have adopted several new business models that are not pursued by startups. Third, startups have espoused some business models that are not pursued by incumbents. Fourth, foreign firms can also affect the ‘green’ transformation of an industry in a focal country. Finally, the identified business model archetypes are likely to be of interest to scholars and practitioners who are seeking an improved understanding of business models in the electrical power industry and the industry’s competitive landscape. https://doi.org/10.1016/j.indmarman.2021.04.003

Without fundamental institutional change, such as a change in laws and regulations, many new technologies cannot achieve their full potential. Efforts to induce institutional change in favor of such technologies are, therefore, increasingly critical for innovative firms. To study how German automotive firms induce change that accommodates autonomous driving (AD) solutions, we conducted a case study research encompassing analysis of 31 interviews, internal archival documents, and media data. Taking the firm as the level of analysis, we identify ten practices employed by innovating incumbents in the three steps of creating saliency for change, mitigating reservations against the desired change, and institutionalizing it. We find that these practices involve shaping-oriented and adaptation-oriented knowledge flows. Through the combined use of these practices throughout the three steps, firms ‘open up’ their development process, utilizing purposive inflows and outflows of knowledge to advance innovation. Our findings contribute to the literature on open innovation and institutional entrepreneurship and suggest that future open innovation research can profit from adopting an institutional entrepreneurship perspective. 

Are stakeholder management and innovation substitutes or complements in affecting firm performance? Extant research provides support for both positions and thus leaves us with a puzzle. We conduct an exploratory fuzzy set qualitative comparative analysis (fsQCA) of 204 publicly listed European firms combining survey and archival data to formulate theory on how stakeholder management and innovation work (in)effectively together. Distinguishing between internal and external stakeholders and exploitative and exploratory innovation, we elaborate that managing for stakeholders and innovation can be both substitutes and complements depending on a set of contingencies. We discuss boundary conditions and implications for future research.

Artificial Intelligence (AI) reshapes companies and how innovation management is organized. Consistent with rapid technological development and the replacement of human organization, AI may indeed compel management to rethink a company’s entire innovation process. In response, we review and explore the implications for future innovation management. Using ideas from the Carnegie School and the behavioral theory of the firm, we review the implications for innovation management of AI technologies and machine learning-based AI systems. We outline a framework showing the extent to which AI can replace humans and explain what is important to consider in making the transformation to the digital organization of innovation. We conclude our study by exploring directions for future research. doi: 10.1016/j.techfore.2020.120392

Prominent political and societal stakeholders argue that business models (BMs) are pivotal in making a successful transition to a circular economy (CE). However, the existing CE literature has paid little attention to design choices that allow companies to implement circular business models (CBMs) that meet the requirements of their specific situations. Resource sharing (alternatively called asset sharing) is a key practice in making the transition to a CE. The present article, therefore, seeks to gain deeper insights into the CBMs of firms that orchestrate resource-sharing solutions. For this purpose, it uses a qualitative multiple case-study approach and analyzes nine firms that orchestrate virtual power plants in Germany and Switzerland. Specifically, the article explores the design choices with which firms are faced when they implement CBMs, and it examines different implementation strategies that flow from making certain design choices. The article also identifies transition pathways that enable firms to move between different implementation strategies in order to increase economic and environmental gains. The present article can serve as a stimulus for further detailed analyses of other BMs that are important to a CE in the future.

This study systematically analysed 237 frugal innovation cases in
order to understand the consequences and implications of market choice on the
characteristics of a successful frugal innovation. The results demonstrate that
this type of innovation is disruptive to its respective target market. Further, the
study shows that firms that want to achieve such innovation tend to focus either
on activities along the value chain or the solution (product/service) itself. This
distinction yielded four clusters of frugal innovation, which are described in
detail, including aspects regarding strategy, organisation, processes and
technology.

We investigated the state of artificial intelligence (AI) in pharmaceutical research and development
(R&D) and outline here a risk and reward perspective regarding digital R&D. Given the novelty of the
research area, a combined qualitative and quantitative research method was chosen, including the
analysis of annual company reports, investor relations information, patent applications, and scientific
publications of 21 pharmaceutical companies for the years 2014 to 2019. As a result, we can confirm that
the industry is in an ‘early mature’ phase of using AI in R&D. Furthermore, we can demonstrate that,
despite the efforts that need to be managed, recent developments in the industry indicate that it is
worthwhile to invest to become a ‘digital pharma player’.

Transformation through digital innovation is becoming an imperative for every city. The ‘Smart City’ concept promises to solve the most urgent queries of progressive urbanization in the area of mobility, energy, water supply, security, housing deprivation, and inclusion. Despite the exploitation of existing potential in lighthouse-cities that include Barcelona, London, Munich, Lyon, and Vienna, the less tenacious pursuit of smart city possibilities in the majority of municipalities has resulted in major discrepancies between leading smart cities and those that are less aspirational. Although the necessity of action is frequently recognized, an appropriate path of action remains obscure.

Smart Cities: Introducing Digital Innovation to Cities offers answers, with clarifying examples, to questions that have remained unanswered for many cities. The book identifies and addresses the core elements and potential of smart cities, best practice methods and tools to be implemented, as well as how diverse stakeholders might be effectively integrated.

Based on perennial international research in the field of smart cities, this book brings together the authors' collective experience in practice-based political, administrative, and economic projects to provide a common framework to guide and engage key stakeholders in the transformation and realization of smart cities.

Today, virtualizing pharma R&D is increasingly related with data analytics and artificial intelligence (AI), technologies that have been developed by software companies outside the healthcare sector. The process of virtualizing pharma R&D is closely related to the technological advancements that result in the generation of large data sets ranging from genomics, proteomics, metabolomics, medical imaging, IoT wearables and large clinical trials, making it necessary for pharma companies to find new ways to store and ultimately analyze information. As a consequence, pharma companies are experimenting with AI in R&D ranging from in-silico drug design to clinical trail participants identification or dosage error reduction.

Recent research suggests that effectuation principles such as flexibility, precommitments, and affordable loss may differ substantially from one another. Responding to the call to clarify the effectuation concept, our study introduces the distinction between promotion‐ and prevention‐focused effectuation principles. It argues that promotion‐focused (prevention‐focused) principles are positively (negatively) associated with a firm's entrepreneurial orientation (EO). It further argues that causation is also promotion‐focused and positively associated with EO. An analysis of 151 Swiss energy small and medium‐sized enterprises supports this account. Thus, our study suggests that some effectuation principles are more similar to causation in their underlying regulatory focus and their relationship with EO than they are to other effectuation principles. We offer several paths for future research on effectuation, causation, and EO that emerge from these findings.

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This book investigates and highlights the most critical challenges the pharmaceutical industry faces in an increasingly competitive environment of inflationary R&D investments and tightening cost control pressures. The authors present three sources of pharmaceutical innovation: new management methods in the drug development pipeline; new technologies as enablers for cutting-edge R&D; and new forms of cooperation and internationalization, such as open innovation in the early phases of R&D. New models and methods are illustrated with cases from Europe, the US, and Asia. This third fully revised edition was expanded to reflect the latest updates in open and collaborative innovation, the greater strategic importance of venture capital and early-stage investments, and the new range of emerging technologies now being put to use in pharmaceutical innovation.

This study investigates business models for frugal innovation (i.e. a specific form of resource-constrained innovation) in the medical device and laboratory equipment industry in the context of emerging markets. Based on original data from five case studies, we investigate how firms can set up value creation and value capturing mechanisms to reach new customer segments in remote rural areas with unprecedented value propositions. With this research, we contribute to the literature on frugal innovation and business models in emerging markets. It is among the first empirical studies to apply a fine-grained perspective on resource-constrained innovation in emerging markets. In doing so, we focus on its most disruptive form, which is when these innovations entail entirely new applications. We advance and detail the value proposition for frugal innovation in these industries and argue that frugal innovation create new markets. Further, we show how firms set up their value creation and value capturing mechanisms to achieve the value proposition and identify two distinct Research & Development (R&D) strategies for frugal innovation.

This paper identifies technologically reflective individuals and demonstrates their ability to develop innovations that benefit society. Technological reflectiveness (TR) is the tendency to think about the societal impact of an innovation, and those who display this capability in public are individuals who participate in online idea competitions focused on technical solutions for social problems (such as General Electric's eco‐challenge, the James Dyson Award, and the BOSCH Technology Horizon Award). However, technologically reflective individuals also reflect in private settings (e.g., when reading news updates), thus requiring a scale to identify them. This paper describes the systematic development of an easy‐to‐administer multi‐item scale to measure an individual's level of TR. Applying the TR scale in an empirical study on a health monitoring system confirmed that individuals' degree of TR relates positively to their ability to generate (1) more new product features and uses, (2) features with higher levels of societal impact, and (3) features that are more elaborated. This scale allows firms seeking to implement co‐creation in their new product development (NPD) process and sustainable solutions to identify such individuals. Thus, this paper indicates that companies wishing to introduce new technological products with a positive societal impact may profit from involving technologically reflective individuals in the NPD process.

We study the effect of formal organizational architecture on the extent to which a focal subsidiary creates competence that is "useful" to other units of a multinational corporation (MNC). Elements of formal organizational architecture represent levers by which parent firm and subsidiary managers can realize their intentions. Building on motivation theory, we argue that an appropriate organizational architecture stimulates a subsidiary's motivation to create internationally "useful" competence so that its extent of competence creation will increase. We develop and empirically test hypotheses for three specific organizational elements, viz.: a home-base augmenting mission, interfaces with other MNC units, and the subsidiary's strategic and operational autonomy. Unique survey data from 287 subsidiaries provide intimate insights into the internal structure of MNCs and strongly support our account. We close by discussing the implications of our study for the academic literature, management practice, and future research.

Despite the significant role of radical innovation as a driver of firm growth and performance, the consequences of resource constraints for radical innovation outcomes remain unknown. Our paper addresses this gap. We combine arguments from entrepreneurship theory and the theory of recombinative innovation to construct an overarching theoretical framework that argues why resource constraints can promote, rather than impede, radical innovation. We then build hypotheses on two specific resource constraints, knowledge and financial, and test these by a lagged-variable random-effects Tobit model with longitudinal
data from an exceptionally large and detailed innovation survey. Controlling for absorptive capacity, firm age, and firm growth, we find full support for the hypothesis that knowledge constraints spur radical innovation and partial support for the hypothesis that financial constraints spur radical innovation. We discuss the theoretical significance of these findings and point to managerial implications and paths for future research.

Strategic management scholars have long emphasized the importance of innovation for a firm's competitive advantage and performance. However, the current state of knowledge about the strategic management of innovation is characterized by conflicting theoretical predictions, persisting knowledge gaps and theoretical inconsistencies. Adopting a ‘systematic’ approach to reviewing the literature, this paper combines different quantitative methods – co‐word analysis, cluster analysis and frequency analysis – to review 342 articles on the strategic management of innovation published in seven journals from 1992 to 2010. On the basis of these analyses, suggestions are developed for future research which could help to promote future theory development and provide relevant material for policy decisions that managers and executives have to make when they manage innovation.

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Past research on alliances has elaborated on the motives, determinants and benefits of cooperative relationships between firms. Notwithstanding their benefits, alliances entail mutual dependence on partners' complementary resources, and this is particularly true for vertical R&D alliances, where the development of technological innovation depends largely on suppliers' R&D results. In such settings, alliances may be prone to rigidities when it comes to developing breakthrough innovations. This article illustrates how the automobile manufacturer BMW mitigated its dependence on its established suppliers and engaged in a cross-industry alliance with a ‘non-supplier' to successfully develop a breakthrough innovation. Based on the case, we discuss the strategic and operational challenges inherent in cross-industry R&D alliances with non-suppliers. Our findings imply that the success of cross-industry alliances depends on specific actions at the strategic and operational levels.

Institutional openness is becoming increasingly popular in practice and academia: open innovation, open R&D and open business models. Our special issue builds on the concepts, underlying assumptions and implications discussed in two previous R&D Management special issues (2006, 2009). This overview indicates nine perspectives needed to develop an open innovation theory more fully. It also assesses some of the recent evidence that has come to light about open innovation, in theory and in practice.

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There is currently a broad awareness of open innovation and its relevance to corporate R&D. The implications and trends that underpin open innovation are actively discussed in terms of strategic, organizational, behavioral, knowledge, legal and business perspectives, and its economic implications. This special issue aims to advance the R&D, innovation, and technology management perspective by building on past and present studies in the field and providing future directions. Recent research, including the papers in this special issue, demonstrates an increasing range of situations where the concept is regarded as applicable. Most research to date has followed the outside‐in process of open innovation, while the inside‐out process remains less explored. A third coupled process of open innovation is also attracting significant research attention. These different processes show why it is necessary to have a full understanding of how and where open innovation can add value in knowledge‐intensive processes. There may be a need for a creative interpretation and adaptation of the value propositions, or business models, in each situation. In other words, there are important implications for new and emerging methods of R&D management.

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In this article, the authors analyze the field of international entrepreneurship (IE), which is in desperate need of further theory development. They study the field of IE since its inception by offering a comprehensive review of 179 articles on IE published in 16 journals over 14 years, covering the academic disciplines of strategic management, international business, entrepreneurship, and technology and innovation management. From a systematic content analysis of this literature, the authors develop an organizing framework to analyze the field's current status. On the basis of this analysis, the authors can identify theoretical inconsistencies, conflicting predictions, and knowledge gaps that all forestall the further development of IE research. They then develop directions for future research that can help to overcome these obstacles and promote future theory development.

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Cisco is regarded as one of the world's most innovative companies. It does very little research and acquires most of its technology from external sources. After Solow (1957) had found innovation and technical progress to be the main drivers for economic growth, researchers and managers associated the establishment of a strong internal R&D capability with innovativeness. Innovations, after all, were generated by a company's own researchers, the firm's own engineering department realized the transition of ideas to commercial products, and the diffusion and exploitation of innovation was driven by the innovating firm itself.

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Open Innovation is a phenomenon that has become increasingly important for both practice and theory over the last few years. The reasons are to be found in shorter innovation cycles, industrial research and development's escalating costs as well as in the dearth of resources. Subsequently, the open source phenomenon has attracted innovation researchers and practitioners. The recent era of open innovation started when practitioners realised that companies that wished to commercialise both their own ideas as well as other firms' innovation should seek new ways to bring their in-house ideas to market. They need to deploy pathways outside their current businesses and should realise that the locus where knowledge is created does not necessarily always equal the locus of innovation - they need not both be found within the company. Experience has furthermore shown that neither the locus of innovation nor exploitation need lie within companies' own boundaries. However, emulation of the open innovation approach transforms a company's solid boundaries into a semi-permeable membrane that enables innovation to move more easily between the external environment and the company's internal innovation process. How far the open innovation approach is implemented in practice and whether there are identifiable patterns were the questions we investigated with our empirical study.
Based on our empirical database of 124 companies, we identified three core open innovation processes: (1) The outside-in process: Enriching a company's own knowledge base through the integration of suppliers, customers, and external knowledge sourcing can increase a company's innovativeness. (2) The inside-out process: The external exploitation of ideas in different markets, selling IP and multiplying technology by channelling ideas to the external environment. (3) The coupled process: Linking outside-in and inside-out by working in alliances with complementary companies during which give and take are crucial for success. Consequent thinking along the whole value chain and new business models enable this core process.

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Research and development are subject to different location drivers. The analysis of 1021 R&D units, each distinguished by its main orientation towards either research or development work, reveals that research is concentrated in only five regions worldwide, while development is more globally dispersed.

Our research is based on 290 research interviews and database research in 81 technology-intensive multinational companies. We identify two principal location rationales—access to markets and access to science—as the principal determinants for four trends that lead to four archetypes of R&D internationalization: ‘national treasure’, ‘market-driven’, ‘technology-driven’, and ‘global’. Their organizational evolution is characterized by four trends. The model is illustrated with short cases of international R&D organization at Kubota, Schindler, Xerox, and Glaxo-Wellcome.

Differences in R&D internationalization drivers lead to a separation of individual R&D units by geography and organization. Current belief is to integrate R&D processes; separation seems to contradict this trend. We argue that this need not be the case, for there are good reasons to maintain some independence between research and development.

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