Studying the relationship between multi-sided platforms (MSPs) and open innovation (OI)

Abstract

There is growing attention to the study of open innovation, given the changes in the social organization and market structures. New ways of engaging with customers and partners have emerged that are replacing traditional models of innovation that take either long periods of time and/ or large investments of resources. Huff, Moslein and Reichwald (2013) identify a few major shifts that make open innovation imperative. First is the increasing demand for newer products/ services and experiences amongst consumers and stakeholder groups, who are willing to contribute to the problem definition and solution. Second, technological advancements have shrunk the time, cost and effort required to collaborate and contribute; have made it easier for creating prototypes and test them (like the evolution of 3D printing); and increasing consciousness of collaborative work due to the evolution of social media. Thirdly, organizations competing in global markets or with global competitors are under increasing pressure to seek more and varied ideas without losing their focus on cost competitiveness. Given the constraints of intellectual resources organizations face, open innovation has become the imperative. Open innovation (OI), therefore becomes the one means by which organizations (a) meaningfully engage with their customers in co-creation, (b) optimize their existing innovation resources, and (c) access a larger pool of innovation resources leveraging technology and social media.