Open Innovation Is Becoming Increasingly Important For Firms Competitive Advantage

My background research in externalities first led me to investigate the subject of knowledge transfers, especially concerning the areas of partnering with another firm for the support of the software applications. Reading the literature soon exposed the concept of knowledge spillovers and their effect on innovation, an externality that I had not anticipated. Keeping in mind the high priority of intellectual property at my worksite opened the question of what risks were involved in application support provided by outside firms.

Open innovation can lead to many conflicts on what to include in innovated products and what to exclude

Knowledge management was defined as the turning of information into actionable knowledge which can be accessed by people who can apply it. Robbins (2003) gives a time perspective in his definition of knowledge management. He mentions as part of knowledge management the distribution of the right information to the right people at the right time. Lytras et al (2002) gives a definition of knowledge management which emphasises the purpose of knowledge management. In the definition creation of new capabilities, enablement for superior performance, encouraging innovation and enhancement of customer value were mentioned. For the purpose of this study the researcher summarised knowledge management as the intentional process of coordinating people, technology and systems to optimise creation and sharing of intellectual

Intellectual capital (IC) and knowledge management (KM) have become critical buzzwords in the business lexicon. This is particularly true of companies such as Riordan Manufacturing, a company which produces high-tech, cutting edge materials for the plastics industry and sells them to a variety of firms around the world. This paper will survey how Riordan currently deploys these concepts and also explore potential areas for future improvement.

Furthermore, it is concluded that a successful intra-firm technology transfer management is vital for MNC to remain competitive and innovative in such disruptive environment. In answering the question, the challenges and solutions highlighted serve as references for technology managers. It is also worthwhile to note the effectiveness for MNCs to invest in human resource program that promote human interaction and collaborative culture. However, there are limitations to this essay as to the extent of analytical tools or

To get sustainable competitive advantage, the significant role of knowledge management has been explored. Knowledge management causes companies’ core competencies to become stronger. Therefore, competitive advantage has been more sustainable. Knowledge management is perceived as the development of organizing the intangible asset of a firm. The economic and production level of a company relies more on its brainpower, human capital and invisible competences than its physical assets. The function of each business relies upon the knowledge of its human capital.

With the benefit of hindsight, it is apparent that in the knowledge era, creating and leveraging knowledge is the business of business. By all available measures, the stock market is already providing handsome rewards to companies that successfully leverage their knowledge--a phenomenon that will almost surely grow in significance as knowledge-based organizations increase in size and number. A number of firms are anticipating this and looking to knowledge management to enhance, measure, and manage the knowledge of their employees and organizations more effectively.

Dunne, R. 2011. 8 Reasons Why Insourcing is the New Outsourcing in Innovation. [online] Available at: http://product-ivity.com/insourcing-vs-outsourcing/ [Accessed: 1

Capabilities in the external network: Having reliable alliances with outside companies can help in forward movement with advancements in new technologies.

These R&D labs usually concentrated on bringing out new technologies for self-commercialisation. This process can be viewed in the form of a funnel, where a large number of varied ideas and concepts can be trimmed down to few of those concepts and ideas that best meet the requirements of the company. (OECD, 2008) In recent times, companies have become more open with their innovation process, leading to revolution described as “Open Innovation” by Chesbrough (2003). This ‘open innovation’ model is a more dynamic model when compared the traditional model as there is much more interaction between knowledge assets outside the company as well as inside. Henry Chesbrough (2003) in his book “Open Innovation: New Imperative for creating and profiting from technology” defines open innovation as a concept in which companies must use ideas from inside as well as outside sources and find internal and external ways to reach the market in order to advance their technological capabilities. Open innovation combines these 3

From the above analysis we can conclude that the outbound open innovation can really improve enterprise performance. Then, we would like to know how is it to create value for those companies? It is a very sophisticated problem, previous researchers have not make an in-depth analysis for a long time. In order to unravel this ‘ mystery ’, we have to introduce the innovation value chain to help us unlock the ‘secrets’. Van de ven et al.(1999) pointed out that innovation is a variety of roles intertwined, and a complex process of intervention. The innovation process is poorly understood, and at the same time innovation is being enveloped in an unobservable ‘black box’. Subsequently, Hansen&Brkinshaw(2007), Roper, et al.(2008) and other scholars drew on porter 's value chain theory, and introduced the idea of the ‘chain’, the knowledge commercialization of the innovation process is seen as a flow value chain, the three main components including knowledge production, knowledge transfer and knowledge diffusion. Until now, the understanding of the essence of the innovation process has been greatly enriched, and the ‘black box’ of the innovation process seems to have been gradually open. It is the time to

Knowledge Management has been a core requirement of many organizational practices and mostly in gaining competitive advantage over other firms. Knowledge itself is precious but if not used properly, then

2) Chesbrough, H., W., (2003). The era of open innovation. MIT Sloan Management Review 44 (3): 35–41.

Innovation offers the companies a competitive advantage. Presently and within the future, more than any time in history, the key to competitive advantage is innovation. However innovation will facilitate businesses meet all of their strategic challenges, not simply competition; to illustrate, in confronting accelerating rates of change, globalization, apace advancing technology, a additional numerous workforce, associated a modification from an industrial to a knowledge-based economy. Meeting all of those challenges helps the firm attain competitiveness, and meeting these challenges suitably depends on innovation. Innovation allows a firm to workout its challenges in distinctive ways in which build competitive advantage either through relative differentiation, a relative low-priced position, or few acceptable level of each. Innovation cannot assure success, however success cannot be achieved within the end of the day without it.

The tendency of companies in recent years, as a result of globalization processes, has been to look for business strategies in order to achieve improvement and competitiveness processes that become "fundamental for the growth of both production and productivity "(Oslo Handbook, 2005), where innovation is the necessary tool for generating value and a source of competitive advantage. Explaining the relationships with the product, the process and the management of the company and the innovation models, which in most cases are adapted to the needs of each company.