Knowing the Ropes in Open Innovation : Understanding Tensions through a Paradox Lens

Abstract: The fundamental paradox of disclosure suggested by Kenneth Arrow represents a challenge in contemporary open innovation settings. Potential negative outcomes of this paradox – e.g. misappropriation of ideas – are still not fully avertable. Researchers, practitioners and policy makers strive to untangle tensions related to this paradox, because failure to manage such tensions might entail lost jobs and hampered economic and technological growth.The purpose of this thesis is to provide a deeper understanding of this paradox by combining three perspectives on tensions in open innovation and applying a paradox lens. The overarching perspective is of value co-creation–value capture. The thesis comprises of five papers that are based on quantitative, qualitative and conceptual studies. The findings reveal: 1) characteristics of tensions; 2) factors that create tensions; and 3) possible solutions and pitfalls to managing said tensions. Findings show that tensions may be managed as paradoxical, dilemmatic or dialectical, depending e.g. on the need to be open or on the overlap between a product’s solution and its characteristics. Moreover, tensions could be spurred by a variety of factors, which may be categorized as: plurality of views, scarcity of resources, change, and combinations thereof (compound factors).Possible solutions to managing tensions include e.g. increasing staff awareness about intellectual property issues or improving collaboration contracts. Possible pitfalls are linked to over-focusing on either co-creating or on capturing value, and also to subsequent tensions. Findings also reveal a category of factors with dual role, which depending on their intensity, may lead to either solutions or to pitfalls. This hints towards additional layers of complexity concerning the paradox of disclosure. The findings contribute to theory on open innovation, appropriability and organizational paradox, and have important implications for practitioners and policy makers.

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