Born digital, raised to be open: Emergence of open innovation strategy and intellectual property strategy

Paper presented at the World Open Innovation Conference, San Francisco, USA, December 13-15, 2017.

Open innovation strategies have become commonplace in practice and as object of study. Although a lot of work has identified types of strategies and motives for employing them, relatively little is known about why and how exactly firms transition from a closed- to an open strategy. In this study, the strategy development of firms engaged in various forms of open innovation (e.g. open source software, inbound and outbound licensing, open hardware) is described in the context of digital startups. For these companies that find themselves in an early stage of development, strategy making is an especially dynamic, emergent process in which motives are weighed and strategy is shaped through changing conditions and considerations. In a series of case studies, innovation and intellectual property management strategies are described and analyzed as well as the process leading up to their actualization. Many of the motives for protecting IP on the one hand, and engaging in open innovation on the other hand have found an application in the literature before, however, results suggest some factors may be more important than previously stated while others may not be as universally prevalent as is often presumed. The way in which these motives are considered by decision makers reflects a strategy making process that is iterative and dynamic, rather than planned. Moreover, the resulting strategy seems to be neither fully open nor fully closed, regardless of how the company identifies itself. In all cases, some combination of open and closed strategies resulted, making the holistic strategy a modular one in which open and closed elements built on and reinforced one another to create value for the company.