Sourcing Innovation in the Digital Age

Abstract

This paper introduces a 2018 innovation survey of 300 large firms sampled to be representative of corporate innovation in 8 countries from around the world. Senior innovation leaders at these large companies were asked more than 100 questions about how they innovate and which internal and external innovation sources they use. These questions also gathered data on two innovation projects per firm, for a total of 600 across our sample.

We find that open innovation at these companies is pervasive, but also recent. Only in the past five years have many firms started innovating with external partners like universities, third-party experts, startups or crowd. Overwhelmingly, firms use these new external innovation sources for digital technologies where they have internal capability shortfalls. Despite the remarkable growth in the use of external innovation sources, internal innovation sources remain more important for companies and produce the projects most likely to provide competitive advantage.

Keywords: innovation sources, capabilities, digital, open innovation, competitive advantage

JEL Classification: O32