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November 28, 2018

The relation between national culture and open innovation

This article is an excerpt of recently-conducted research on open innovation, as part of my thesis for the Master’s in Management at the Open University of the Netherlands.

Recent research conducted at the Open University of the Netherlands shows interesting results with respect to the relation between national culture (as measured by Hofstede’s dimensions) and Open Innovation. Open Innovation involves the integration of externally created knowledge within the internal innovation process (inbound OI); the externalization of knowledge developed within the boundaries of the firm that is further developed and commercialised by other parties (outbound OI); the joint development of new knowledge by several partners (coupled OI). Our findings have implications for managers developing and implementing global Open Innovation strategies as well as policy makers aiming to develop policies oriented at attracting Open Innovation activities to their countries:

  • There is a negative relation between Uncertainty Avoidance and the inclination to engage in coupled OI. This means that individuals and organizations located within countries, which deal with ambiguity by relying on formal rules and procedures to ensure order and predictability, are less likely to conduct collaborative OI projects. Innovation managers aiming to engage in Open Innovation through the use of strategic alliances, joint ventures, and other forms of partnerships are thus more likely to be successful when searching for innovation partners in countries scoring low on uncertainty avoidance such as Singapore, Denmark, Hong Kong or Sweden. Policy makers in countries scoring high on uncertainty avoidance such as Greece, Portugal, Russia, and Belgium may be able to encourage collaborative innovation by developing rules and regulations that reduce the amount of uncertainty related to collaboration. Similarly, education focused at the effective management of collaborative innovation processes in these countries could reduce the perception of uncertainty and thus stimulate coupled OI.
  • There is a positive relation between Indulgence and the inclination to engage in outbound OI. Countries scoring high on indulgence value the free gratification of human desires related to enjoying life while countries scoring low on indulgence value restraint and more modest lifestyles. Individuals and organizations located in countries scoring high on indulgence such as Sweden, New Zealand, Australia, and Denmark are more likely to engage in outbound OI than those from countries scoring low on indulgence such as Hong Kong, Russia, China, and India. Individuals and organizations from countries scoring high on indulgence may be very willing to benefit from the commercialization of intellectual property rights. Innovation managers looking to work, for example, with licensing partners may thus find more suitable candidates in countries scoring high on indulgence.
  • There is a positive relation between Long-Term Orientation and the inclination to engage in outbound OI. Individuals and organisations located within countries scoring high on long-term orientation are likely to be characterised by perseverance and thrift that lead them to work towards future goals and rewards rather than live mostly in the present or past. Individuals and organizations located in countries scoring high on long-term orientation such as South Korea, Japan, China, and Germany may be more willing to develop long-term strategies for the development and commercialisation of intellectual property rights than those in countries scoring low on long-term orientation such as Australia, Ireland, the United States, and the Philippines. In the former set of countries, innovation managers may find more suitable candidates for engaging in licensing activities.

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