Internal vs. External Learning in New Product Development: Effects on Speed, Costs and Competitive Advantage

Posted: 31 Dec 2001

See all articles by Eric H. Kessler

Eric H. Kessler

Pace University - Lubin School of Business

Paul E. Bierly

James Madison University - College of Business

Shanthi Gopalakrishnan

New Jersey Institute of Technology

Abstract

The purpose of this study was to investigate how different technology sourcing strategies throughout the new product development process influenced innovation speed, development costs, and competitive advantage. We studied 75 new product development projects from ten large, U.S.-based companies in several industries. Results indicated that: (1) more external sourcing during the early (i.e., idea generation) stage was related with lower competitive success; (2) more external sourcing during the later (i.e., technological development stage was related with slower innovation speed; and (3) development costs tended to rise with greater reliance on external sources of technology, but this result was not statistically significant.

JEL Classification: M11

Suggested Citation

Kessler, Eric H. and Bierly, Paul E. and Gopalakrishnan, Shanthi, Internal vs. External Learning in New Product Development: Effects on Speed, Costs and Competitive Advantage. Available at SSRN: https://ssrn.com/abstract=236761

Eric H. Kessler (Contact Author)

Pace University - Lubin School of Business ( email )

1 Pace Plaza
New York, NY 10038-1502
United States
212-346-1993 (Phone)

Paul E. Bierly

James Madison University - College of Business ( email )

ZSH 541
Harrisonburg, VA 22807
United States
540-568-3236 (Phone)

Shanthi Gopalakrishnan

New Jersey Institute of Technology ( email )

University Heights
Newark, NJ 07102

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