Paradox of Open Innovation

Mar 20-2019   

Hardly can open innovation generate innovations of true commercial significance; nor can it afford companies unique or sustainable competitive advantage, simply because whatever can be purchased on the open market is meant to be available to everyone, NSD Prof. Ma Hao thus sums up the paradox of open innovation in his paper for a recent issue of Tsinghua Management Review. Despite much fanfare about openness and inclusiveness, firms hinge on the appropriation of innovation and value creation to survive and thrive; therefore, competition is destined to be a life-or-death issue. Researches have found that companies with unique competitiveness tend not to base their R&D centers in industrial clusters; those in industrial clusters tend to set eyes on acquiring the technologies of other firms. Companies normally set specific goals and deadlines for innovation, and can’t over-rely on open innovation whose process is random and serendipitous at best. Prof. Ma also tackles such issues as the governance of the open innovation community, the pay-or-free conundrum, and the different dimensions of measuring the degree of openness (and closeness at the other end of the spectrum).