Open innovation ecosystems: a mixed methods study on the strategic management of inter-organisational openness

Inter-firm trust and openness have been the subject of considerable attention in business innovation research. However, the strategic role of trust-based openness in innovation ecosystems is not as well understood. Moreover, while the concept of open innovation ecosystems is the mantra of contemporary innovation research, no-one has attempted to develop a validated measurement model for this construct. Finally, while debate continues about inter-firm collaborations and participatory modes of innovation, business strategy researchers have focused almost exclusively on the competitive advantage resulting from a firm’s inflow openness, i.e., obtaining and controlling valuable resources. A firm’s outflow openness strategy is rarely reflected on. To address these issues, this mixed methods research (conducted in Australia and USA) presents four analyses regarding (1) the role of trust-based openness in a firm’s ecosystem strategy, (2) the process of inter-firm trust-based openness in innovation, (3) the measurement of open innovation ecosystems, and (4) the competitive advantage of interdependent firms in open innovation ecosystems.

This dissertation synthesises resource dependence theory, social exchange theory, and the resource-based view. It first develops a conceptual model for strategising in ecosystems from a systematic review of relevant literature. Then, using the grounded theory method, it conducts three rounds of 54 interviews with senior managers in Macquarie Business Park, Australia, to theorise the process of inter-firm openness. A new scale is developed and validated against four survey samples of managers, two from Silicon Valley, USA (n=370; 412), and two from Macquarie Business Park, Australia (n=205; 424). Finally, the theorised model is empirically tested in two countries using hierarchical multiple regression and structural equation modelling. Results reveal (1) a significant role for trust-based openness in a firm’s ecosystem strategy, (2) four overarching dimensions of inter-firm openness which, occurring in chronological order – realisation, socialisation, strategic alignment, and two-way openness –explain how firms systematically adopt openness and migrate from traditional Egosystems to open innovation ecosystems, (3) the newly developed five-dimensional open innovation ecosystem-scale replicated across samples and exhibited strong psychometric properties, and (4) a firm’s outflow openness (i.e., allowing resource outflows) represents a gainful strategy of resource-building and of shaping innovation advantages in ecosystems.

The thesis contributes to the existing body of knowledge in four ways. First, it extends the traditional two-dimensional (cognition and action) strategy formulation model by integrating the neglected third relational dimension. Second, it develops a theory of inter-firm, trust-based openness in innovation. Third, it develops and validates a scale for measuring an open innovation ecosystem, which is the first measurement model of this construct. Last, contrary to the traditional wisdom, it demonstrates that allowing resource outflows even at a lower price (to benefit ecosystem partners) can positively impact a firm’s competitive advantage in ecosystems. The thesis refines and extends the scope and application of the resource-based view to open innovation ecologies. Implications of the findings are discussed and directions for future research are recommended.