Opening Up for Competitive Advantage – How Deutsche Telekom Creates an Open Innovation Ecosystem

Abstract

When, on 21st September 2006, 'The Economist' compared incumbent telecommunication operators with dinosaurs that could soon face extinction, most readers were ready to agree. The mixture of declining revenues and fierce competition was believed to shake the market and soon to dethrone former national champions. However, there are ways to fight that extinction and one way is to open up for competitive advantage. This paper reflects on a case study at Deutsche Telekom, the German national telecommunication operator. The aim of this study is to analyse to what extent the open innovation paradigm has been embraced inside this now multinational company. Using empirical evidence from 15 in-depth interviews, we identify 11 open innovation instruments and detail their value contribution. We can show that Deutsche Telekom has successfully enhanced its innovation capacity by opening up its traditional development process and embracing external creativity and knowledge resources.

Keywords: open innovation, collaborative innovation, Deutsche Telekom

JEL Classification: M1, M11, O31, O32, O33