Measuring Open Innovation Practices: How Openness Relates to Firm Performance
The Academy of Management posted a study by Henry Chesbrough and Qinli LU which employed an unsupervised learning technique (i.e. topic modelling) that utilizes natural language processing to extract information on companies’ open innovation practices from their annual reports. Their approach allows them to develop more granular practices within open innovation, and their results show that these practices vary in their impact on business performance. Open innovation practices regarding customer engagement have a particularly significant positive association with firms’ growth potential, compared to other open innovation practices. They relate their results back to the mixed findings on open innovation and firm performance, and conclude that there is no One Size Fits All, or a uniform set of Best Practices, to practice open innovation.
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