The Impact of Product Complexity on Adoption of Web-Based Interactive Innovation Practices

Abstract

The purpose of this paper is to investigate how product complexity influences organizations’ adoption of web-based interactive innovation (WII) and its add-on features. The methodology is based on comparative and longitudinal analysis of 137 cases of WII. The study builds upon existing literature on product complexity, open innovation, open source software, innovation contest, and mass customization. The present analysis builds on our previous study which classifies WII into technology-oriented and product-oriented WII (i.e., TWII and PWII) and reveals that product complexity negatively affects PWII adoption and positively affects company adoption of PWII add-on features. Meanwhile, the adoption of TWII is affected by firm size and industry sector. The results indicate that the main factors that affect adoption of PWII and TWII are different. The findings have implications on the decisions on adoption of PWII and TWII.

Keywords: web-based interactive innovation, product development, product complexity, physical goods, open innovation, case studies, open source, innovation contest, mass customization

JEL Classification: O31, O32