Open innovation and patenting activity in health care
| Date | 02 September 2020 |
| DOI | https://doi.org/10.1108/JIC-03-2020-0076 |
| Pages | 384-402 |
| Published date | 02 September 2020 |
| Subject Matter | Information & knowledge management,Knowledge management,HR & organizational behaviour,Organizational structure/dynamics,Accounting & finance,Accounting/accountancy,Behavioural accounting |
| Author | Beatrice Orlando,Luca Vincenzo Ballestra,Domitilla Magni,Francesco Ciampi |
Open innovation and patenting
activity in health care
Beatrice Orlando
Department of Economics and Management, University of Ferrara, Ferrara, Italy
Luca Vincenzo Ballestra
Department of Statistical Sciences, Universita degli Studi di Bologna, Bologna, Italy
Domitilla Magni
Department of Business Studies, Roma Tre University, Roma, Italy, and
Francesco Ciampi
Department of Economics and Management, Universit
a degli Studi di Firenze,
Florence, Italy
Abstract
Purpose –The study aims to explore the interplay between open innovation and intellectual property.
Differently from previous studies, we argue that open innovation fosters firm’s patenting activity.
Design/methodology/approach –We use linear regression analysis to test model’s hypotheses. Data are
drawn from the Eurostat statistics and refer to a large sample of European firms (NACE Rev.2).
Findings –The findings confirm that open innovation fosters patenting activity inhealth care, also thanks to
huge governments’expenditures in this market.
Research limitations/implications –The study focuses solely on European firms and it adopts a
traditional linear approach. So, we cannot excludethat different dynamics may occur across European borders.
Future research should address this concern by focusing on multi-country comparative studies.
Practicalimplications –Open innovationis the most suitablemodel for health industry,because it improves
both innovation performance and intellectual capital of firms.
Originality/value –The study tackles an existing gap of the literature by considering how the presence of
large customers impacts the strength of intellectual property protection.
Keywords Open innovation, Health industry, Intellectual property, Patenting activity
Paper type Research paper
1. Introduction
The aim of this study is to address the effect of open innovation on intellectual property.
Broadly speaking, open innovation is a form of collaboration between partners from different
organizations and contexts, whose purpose is the co-creation of a novelty by mixing together
their different skills, expertise and knowledge (Chesbrough, 2003;Chesbrough et al., 2006;
West and Lakhani, 2008;Meissner and Carayannis, 2017;Natalicchio et al., 2017;Santoro
et al., 2019;Radziwon; Bogers, 2019). The concept of open innovation emerged in the early
2000s, when Chesbrough (2003a) observed that firms, especially those operating in ICT and
movie industries, have started to search for innovation partners, despite the problem of
intellectual property protection. As a matter of fact, those firms were experiencing a decline of
their innovation capability. So, the only way they had to outgrow competitors was
reinventing themselves by gathering external, fresh ideas. Since then, this alternative way of
doing innovation was named open innovation. This development strategy is deemed as “the
antithesis of the traditional vertical integration model”(Chesbrough, 2006, p. 2), because it is
based on leveraging the intellectual capital of the firm through alliances, rather than through
dimensional growth. So, since the origins, the concept of open innovation was strongly
entwined with that of intellectual property. In the traditional closed innovation model,
companies exert a strict control over intellectual property (Chesbrough, 2003b). Though,
JIC
22,2
384
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1469-1930.htm
Received 6 March 2020
Revised 29 June 2020
Accepted 3 August 2020
Journal of Intellectual Capital
Vol. 22 No. 2, 2021
pp. 384-402
© Emerald Publishing Limited
1469-1930
DOI 10.1108/JIC-03-2020-0076
often this approach revealed itself as value destroying, because the capability of a patent to
generate value for the company depends on the company’s business model. Many patents go
wasted because the company is a bad owner/user and it does not have a market for the related
products (Chesbrough, 2003a).
Thus, a value creating strategy leverages on intellectual property management. The
bedrock of intellectual property management is the consistency between intellectual property
and business model. When there is poor consistency between a patent and the company’s
business model, that patent can be sold out. At the same time, firms can also buy patents on
the market, if they are available.
When this route is not viable, a company can expand its business model by searching for
external complementary knowledge (Chesbrough, 2003). Unlike closed innovation, the open
regimen entails that companies relinquish part of the control over their intellectual property,
with the purpose of achieving a superior growth. Environmental and market characteristics
plays a fundamental role in this choice.
Nowadays, the complexity and unpredictability of markets, along with the environmental
turbulence, has made the logic of the first mover advantage and of closed innovation rather
anachronistic and obsolete in several industries. As Suarez and Lanzolla (2005) clarified, the
first mover advantage, with a strong control over intellectual property, is a poor strategy
when the pace of changes is high and firms navigate in hostile environments. Fast-changing-
environments, characterized by abrupt technological discontinuities, better suits the logic of
the fast-mover advantage. The fast-mover advantage is based on firm’s speed capabilities, or
the ability to execute “faster than competitors at the same costs”(Hawk et al., 2013, p. 1351). In
this fashion, it is proved that open innovation may foster the firm’s race toward the fast-
mover position, thanks to the increased innovation speed (Milan et al., 2020). Intuitively, this
insight seems to suggest that the traditional strain of research claiming that there is a
negative interplay between open innovation and patenting (Lichtenthaler, 2009;Brem et al.,
2017) might be wrong. By contrast, open innovation could allow to develop new patents more
rapidly than closed innovation and at a more convenient cost.
For instance, the Covid-19 outbreak case taught that speediness, along with openness of
information and collaboration are a great source to tackle global challenges, to provide fast-
solutions to complex issues, and to buffer against uncertainty by leveraging intellectual
property and patenting. This is proved by the existence of a wealth of public and private
funding for financing open innovation projects aimed at facing Covid-19. Horizon 2020 calls
are, perhaps, among the most famous public finance provisions for open innovation.
Henceforth, due to environmental turbulence and time-based competition (Chakravarthy,
1997;Calantone et al., 2003;Bolisani and Bratianu, 2017), such kind of open collaborations
seems particularly valuable in the health industry (Robaczewska et al., 2019).
By and large, the positive effect of open innovation on firm’s competitiveness can also be
explained in terms of economic performance (Kobarg et al., 2019;Rauter et al., 2019;Wu and
Ding, 2020).
Not surprisingly, literature has constantly been praising the impact of open innovation on
firm’s performance (Enkel et al., 2009;Lichtenthaler, 2009;Parida et al., 2012;Hun and Chou,
2013;Del Giudice, 2013;Carayannis et al., 2013;Cheng and Huizingh, 2014;Ahn et al., 2015;
Greco et al., 2016;Scuotto et al., 2017;Martinez-Conesa et al., 2017).
However, scholars’opinions on the effect of open innovation on intellectual property is
way more variegated. Intellectual property refers to firm’s intellectual capital. Intellectual
Capital (IC) is deemed one of the most important drivers of competitiveness (Lev, 2003;Veltri
et al., 2011;Lerro et al., 2014).
The ongoing vibrant debate is caused by the fact that, in open innovation, there is a cross-
cutting disaggregation between the two moments of value creation and value capture. Such
disaggregation is determined by the distribution between partners of intellectual property
Open innovation
and patenting
activity in health
care
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