Co-creation of value in Open Innovation: does coopetition matter?

Abstract

Concepts such as co-creation of value as well as open innovation (OI) have emerged in recent years as paradigms in management, on one hand, and innovation, on the other. The first focuses on the creation and appropriation of value on the part of business companies and their partners and considers an individual perspective; the second concerns knowledge transfer between the firm and third parties to support innovation activities. Accordingly, the work aims to identify the conditions under which open innovation leads to value co-creation, as intended above, and which coopetition settings could eventually emerge co-creating value through OI coupled processes. Since the very beginning of the 21st century, the perspective adopted in the research on firm value creation has partially changed, and has concentrated more on actors operating outside the firm as contributors to value creation (Prahalad and Ramaswamy, 2000), has clearly distinguished value creation from value appropriation in several past management theories, and has defined value creation as the creation of new wealth for both the firm and the environment in which it operates (Mocciaro Li Destri and Dagnino, 2005), considering that value creation could be not separate from value capture in that “ontologically value is created and only manifests itself as value captured” (Pitelis, 2009, p. 9). It is to be noticed that 2004, in particular, is to be considered central to the issue discussed in the present work. In that year, in fact, two different streams of literature started to focus on co-creation of value, the first one following a strategic perspective (Prahalad, 2004), and the second one issued in the marketing literature domain (Vargo and Lusch, 2004). These two approaches don’t converge under different profiles due to their different background even if some common traits, as well as some distinctive characteristics could be identified (Aquilani and Abbate, 2015). In this paper we will only consider the strategic perspective, thus we will follow the theoretical approach proposed by Prahalad and Ramaswamy to value co-creation focusing on “the wealth-welfare-wellbeing of all individuals” (Ramaswamy and Ozcan, 2014, p. 284), and leading to a socioeconomic view of value which overcomes the distinction between the “human” and the “economic” (Leavy, 2014, p. 13). Chesbrough’s 2003 seminal work on open innovation defined it as “a distributed innovation process based on purposively managed knowledge flows across organizational boundaries, using [pecuniary and non-pecuniary] mechanisms in line with the organization’s business model”(Chesbrough, 2003; Chesbrough and Bogers, 2014, p. 27). This open model concerning innovation illustrates three different processes that can be carried out to enhance and support knowledge flows among partners which, in turn, can contribute to innovation processes and by consequence also affect value creation. Considering the extant literature, it is clear that open innovation processes can lead to value co-creation. Conversely, value co-creation more often emerges in those innovation activities, carried out with partners, which are at the very core of both the firm success and its ability to create and shape new “liquid” markets (Normann, 2002). According to this perspective, a first research question emerges: under what conditions open innovation can lead to the co-creation of value? In both domains of co-creation of value and open innovation a central issue is represented by the collaboration among partners. As practice demonstrates, partners could have fully or partially overlapping goals, as a consequence coopetition issues arises and a new research questions emerge: which coopetition settings can be identified in the process of value co-creation through OI processes? This second research question, focused on coopetition, has been long underestimated by the literature, even if it represents a key issue both in open innovation processes and in value co-creation. Moreover, the individual perspective characterizing value co-creation following a strategic perspective makes it possible to bridge the gap between research on value co-creation and the individual level of coopetition. This latter, in particular, has been only partially developed and shows its weakness in a more in-depth analysis of the coopetition outcomes, other than knowledge sharing and group/team performance (Baruch and Lin, 2012; Enberg, 2012), and the study of how these outcomes could influence coopetition outcomes both at an organization and an inter-organizational level (Bengtsson and Kock, 2014).