Dynamic Impact of Open Innovation Systems – Comparison with Patent-Licensing

38 Pages Posted: 12 Nov 2014 Last revised: 25 Mar 2017

See all articles by Abhijit Sengupta

Abhijit Sengupta

Surrey Business School, University of Surrey

Vania Sena

University of Essex

Date Written: March 1, 2017

Abstract

A model of open innovation among competing firms is developed. Innovation is modelled as a dynamic sequential process where existing technologies advance through research. New technologies are incorporated into next generation of competing products. This model is implemented in an evolutionary setup, where the static and dynamic consequences of the open innovation paradigm are compared with patent-licensing. Both are found to be equivalent in technology outcomes, but open innovation provides strategic advantages to firms, especially when market size is limited. Furthermore, we identify technology and market level characteristics which impact the evolution of firms and innovation outcomes.

Keywords: open innovation, sequential innovation, market dynamics, appropriation, agent based modelling

JEL Classification: C6, L1, O3

Suggested Citation

Sengupta, Abhijit and Sena, Vania, Dynamic Impact of Open Innovation Systems – Comparison with Patent-Licensing (March 1, 2017). Available at SSRN: https://ssrn.com/abstract=2522942 or http://dx.doi.org/10.2139/ssrn.2522942

Abhijit Sengupta (Contact Author)

Surrey Business School, University of Surrey ( email )

Guildford, Surrey GU2 7XH
United Kingdom

Vania Sena

University of Essex ( email )

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