Digital Commons Network^™

Challenges Of Open Innovation: The Paradox Of Firm Investment In Open-Source Software, Joel West, Scott Gallagher

Faculty Publications, School of Management

Open innovation is a powerful framework encompassing the generation, capture, and employment of intellectual property at the firm level. We identify three fundamental challenges for firms in applying the concept of open innovation: finding creative ways to exploit internal innovation, incorporating external innovation into internal development, and motivating outsiders to supply an ongoing stream of external innovations. This latter challenge involves a paradox, why would firms spend money on R&D efforts if the results of these efforts are available to rival firms? To explore these challenges, we examine the activity of firms in opensource software to support their innovation strategies. …