In this paper we discuss open innovation from the perspective of problem-solving and the theory of the firm. Open, distributed and user innovation, crowdsourcing, peer-based systems, innovation prizes, and various new forms and models of production are raising questions about the emergent nature of innovation, the purpose of organizational boundaries and associated implications for the theory of the firm. We provide a comparative framework for managing innovation, where we delineate and discuss four forms of open innovation (partnership, markets, contests and tournaments and user or community innovation) and compare them with each other and with internal development or hierarchy. We adopt the problem as a unit of analysis and comparatively highlight how different governance forms are efficiently matched to different types of problems. We also discuss associated implications for incentives, value appropriation, property rights and knowledge sharing.
Todd’s a very clever organization theorist whose work gets virtually no play in public management. Well worth discovering.