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Joel WestProfessor, Keck Graduate InstituteAssociate Editor, Research Policy
29 June 2016
How Standards Research Can Inform
Open Innovation EURAS 2016
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Overview• Standards and standardization were open
innovation before there was an “open innovation”
• Also true for co-opetition• Thus EURAS research is relevant to a
broader audience• Publication opportunity:
• Beyond focusing on just standards outcomes• Instead addressing broader questions
• to be cited by both standards and other researchers
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Prior Research
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Standards Research• Standardization activities, processes• SSOs, SDOs, alliances, consortia• Technical compatibility standards
• As artifacts, actors or institutions• Proprietary, open or shades of gray
• Technical and organizational modularity• Platforms, ecosystems and third party
complements• Shared implementations via open source
software (OSS)
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Co-opetition
A firm “is your complementor if customers value your product more when they have the other [firm’s] product than when they have your product alone.”
- Brandenburger and Nalebuff (1996)
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Open Innovation• “Open innovation” coined by Chesbrough
(2003)• New paradigm covers both new and existing
processes• Considerable interest in research and
practice
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Open Innovation (1)
“Open innovation is the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respectively.”— Chesbrough (2006)
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Open Innovation (2)
Not all firms can profit from all innovationsContingent upon creating a business model• Value creation• Sustainable value capture• Embedded in a value network of
suppliers, complementors and customers
Chesbrough (2003, 2006a, 2006b); Chesbrough & Rosenbloom (2002); Vanhaverbeke & Chesbrough (2014)
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Open Innovation (3)
Three modes of open innovation:1. Inbound: accessing external innovations
to improve a firm’s innovations2. Outbound: using external markets to
commercialize those innovations3. Coupled: combining inbound & outbound
flows to innovate inside (or outside) the firm
Gassmann & Enkel (2004), Enkel et al (2009), Piller & West (2014)
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Open Innovation (4)Our interest is the network form• Coupled or inbound• Peer-to-peer (Powell 1990) or hub-and-spokeThese include• Communities• Consortia• Ecosystems• Platforms
West (2014)
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Relates to Standards• Simcoe (2006): open standards have optimal tradeoff
between public value creation and private value capture
• Vanhaverbeke & Cloodt (2006): managing networks for value creation and capture
• West (2006): interdependent networks of complementors and suppliers in systems products
• Dittrich & Duysters (2007): leveraging OI networks to define and implement standards
• West & Lakhani (2008): communities and open innovation
• West & Wood (2013): neglecting complementor value capture leads to collapse of platform ecosystem
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Research Opportunities
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Importance of Framing
For reviewers and editors, framing is essential• What is your paper about?• What literature does it build upon?• What do you promise to deliver?You have a choice of framing• Same study can be framed different ways• Framing must align to actual data, findings
and contribution• Some ways will have more impact than
others
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Narrow FramingThis paper “shows how victory in a standards competition can be negated by the introduction of a new architectural layer that spans two or more previously incompatible architectures.”†
• Study of IBM’s PC strategy in Japan• Relevant to platforms and standards
architectures• Beyond that: ????
† West & Dedrick (2000)
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Broad Framing“This article … describes the use of innovation networks as a means to adapt swiftly to changing market conditions and strategic change.”†
• Study of Nokia’s value creation networks• Relevant to alliances, network management,
mobile telephony, ecosystems, innovation exploration/exploitation
† Dittrich & Duysters (2007)
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Approach
Requires joining another literatureHow could this inform a broader audience?• What research has studied similar
phenomena?• What is the same and different?• What terms/concepts are different?• Who are the key authors?Don’t include too many literatures in one study
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Standardization
Possible themes• Tension of public/private gain• Bilateral/multilateral alliances• Creating/joining enduring or ad hoc
institutions• Governance, voice, permeability,
openness• Knowledge flows• Effects/limits of intellectual property
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Compatibility Standards
Possible themes• Modularity
• Technical• Organizational: “Mirroring” hypothesis• Refactoring/coordination
• Tacit/explicit knowledge• Creating/evolving product architectures
• Interdependence of public/private architectures
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Platforms
Possible themes• Ecosystems
• Identifying, incentivizing complementors• Too much vs. too little friction (excess entry)• Free vs. “free” vs. proprietary complements
• Platform evolution• Linkage of technical and interorganizational
components• Degrees of openness
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OI Opportunities
• Inbound (or coupled) open innovation: evidence of improved firm success
• Coupled open innovation: interdependence of inflows and outflows
• Network forms: interdependence of partner success
• Role of not-for-profit or individual actors
Vanhaverbeke et al (2014); West (2014); West & Bogers (2014); West et al (2014)
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Conclusions
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Conclusions
• Standards research is relevant to a broader audience
• It is possible to study standards topics and address multiple audiences
• Both greater costs and greater potential rewards
• At the same time, it is important to stay true to the phenomenon (an emic perspective)
• “To thine own self be true” — Hamlet, Act 1, Scn 3
