Digital service innovation through open innovation strategies

As the era of the big digital shift continues, and more technology and industry barriers fall, there will be an ever increasing pressure on established companies to accelerate the rate of innovation and seek new business models. With their organizations to a large extent optimized for cost effective delivery within the existing business models, many businesses feel limited in their ability to find the way forward. This is a situation where new knowledge and tools are necessary in order to innovate successfully. Research has not yet revealed enough to establish a full picture of how to drive and facilitate business model innovation in incumbent companies. Even with an increasing focus in research in recent years, there is still lacking a comprehensive framework that help managers navigate. Following, this research project has focused on how to succeed in creating innovative business models in this environment of big digital shifts. Summary: The goal of this doctoral work was two-fold: (1) understand what affects business model innovation processes in incumbent companies, and (2) find mechanism of how to innovate incumbent business models. Consequently, the findings of this thesis has contributed to a better understanding of both business model innovation and how to achieve it. These issues have gained increased importance in industry areas affected by strong environmental shifts, where business model changes also increasingly need to be much more radical.

«PhD prosjektet har gjennom flere empiriske studier tilført ny kunnskap til Sbanken, Norsk næringsliv, og forskning. Kunnskapen er knyttet til etablerte bedrifter sin evne til å identifisere og gjennomføre forretningsmodell-innovasjon. Dette er en type innovasjon som fundamentalt endrer måten bedrifter skaper, fanger og leverer verdi til sine kunder. Evne til forretningsmodellinnovasjon er sentral for at bedrifter skal kunne vedlikeholde eller styrke sin konkurransekraft i dagens dynamiske omgivelser, undersøkelser viser at Norske bedrifter sliter med dette. Med dette som motivasjon har prosjektet avdekket flere sentrale drivere knyttet til å bygge evne for forretningsmodellinnovasjon gjennom aktiv bruk av organisasjonsstrukturer, ledergrupper, og eksterne samarbeid. Når denne nye innsikten tas i bruk, vil etablerte bedrifter i Norsk næringsliv kunne få en styrket posisjon som kan gi utslag i økt verdiskaping, lønnsomhet, og sysselsetting på tvers av bransjer og geografi i Norge.»

Motivation and research gaps As the era of the big digital shift continues, and more technology and industry barriers fall, there will be an ever increasing pressure to accelerate the rate of innovation and seek new business models. Because of slim organizations and strong focus on cost effective delivery in the existing business models, many smaller businesses may be limited in their ability to find the way forward on their own (the 'liability of smallness'). They are in a position where collaboration with external partners is an important tool in order to innovate successfully, but studies are not yet revealing the creative use of open innovation that many innovating smaller companies around the globe are implementing. Much of the empirical studies have, however, targeted large multinational companies, while the study of open innovation in smaller businesses has been more limited. Even if the area of open innovation strategy and service innovation has had considerable focus there are still missing an integrated framework that helps managers decide when and how to deploy which open innovation practices. This includes what is the best way to capture value in collaborative networks, especially when formal protection methods are less feasible, e.g., with service innovations or smaller firms. Studies also show that companies wishing to engage in open innovation must to some degree re-organize their business models to accommodate their open innovation strategies. This includes the governance mechanisms and organizational practices that influence the integration of external knowledge. Still little is known about how companies need to design their business models to match different open innovation strategies. Research questions: -How can open innovation strategies give medium sized digital services providers increased innovation capacity -How business model flexibility is a prerequisite for successful open innovation Questions to be finalized early in the Project.