Exploring the contribution of innovation intermediaries to the new product development (NPD) process: a typology and an empirical study

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<ul><li><p>Exploring the contribution ofinnovation intermediaries to thenew product development (NPD)process: a typology and anempirical study</p><p>Gabriele Colombo1, Claudio DellEra2 andFederico Frattini3</p><p>1Politecnico di Milano, Department of Management, Economics and Industrial Engineering, Piazza L.da Vinci, 32-20133 Milano, Italy. gabriele.colombo@polimi.it2Politecnico di Milano, Department of Management, Economics and Industrial Engineering, PiazzaL. da Vinci, 32-20133 Milano, Italy. claudio.dellera@polimi.it3Politecnico di Milano, Department of Management, Economics and Industrial Engineering, Piazza L.da Vinci, 32-20133 Milano, Italy. federico.frattini@polimi.it</p><p>In the knowledge economy upheld by the European Lisbon strategy, knowledge-intensiveservices are considered a key driver for innovation and competitiveness. A category ofknowledge-intensive services that has become of utmost importance in the last few decadesis new product development (NPD) services, which interconnect distant knowledge domainswith the client firms. In addition to NPD service providers, web-based innovation inter-mediaries have started to help innovative firms access dispersed bodies of knowledge.Despite the heterogeneity of their characteristics, however, a clear typology of the strategiesused by traditional NPD service providers and web-based intermediaries to interact withtheir knowledge sources and with their clients is missing. This typology would be very usefulfor those firms that are willing to collaborate with innovation intermediaries because itcould highlight the typologies of NPD problems different intermediaries are apt to addressand the managerial challenges that working with them entails. Developing such a classifi-cation framework is the main goal of this paper.The typology proposed in this paper suggests that innovation intermediaries should bedistinguished based on the following: (1) the way they access their distributed knowledgesources and (2) the way they deliver value to their clients. By combining these two dimensions,four categories of innovation intermediaries are identified, which are named brokers, media-tors, collectors and connectors. A multiple case study analysis involving four innovation inter-mediaries and 12 of their clients is presented in the paper. The analysis provides exploratoryinsights into (1) the typologies of NPD problems that each class of intermediaries addressesand (2) the managerial challenges that working with each of them entails. These preliminaryfindings call for further theoretical and empirical research into the complex interactionamong innovation intermediaries, their dispersed sources of knowledge and their clients.</p><p>bs_bs_banner</p><p> 2014 RADMA and John Wiley &amp; Sons Ltd 1</p><p>mailto:gabriele.colombo@polimi.itmailto:claudio.dellera@polimi.itmailto:federico.frattini@polimi.it</p></li><li><p>1. Introduction</p><p>In the knowledge economy upheld by the Euro-pean Lisbon strategy, knowledge-intensive ser-vices are considered a key driver for innovationand competitiveness (NSF, 2010). A category ofknowledge-intensive services that has become ofutmost importance in the last few decades is newproduct development (NPD) services. NPD serviceproviders span multiple markets and technologydomains and support their clientsNPD process with abroad array of knowledge-intensive services, such astechnology and market scouting, concept generationand design, engineering and testing (Czarnitzki andSpielkamp, 2000). Because innovation is increasinglythe result of novel associations among pieces of pre-viously unrelated knowledge (Schumpeter, 1934;Kodama, 1992), NPD service providers spur innova-tion by connecting knowledge domains that are other-wise disconnected (Hargadon and Sutton, 1997;Hargadon, 1998).</p><p>NPD service providers adopt different intermedi-ary strategies for connecting unrelated knowledgedomains with their clients (Obstfeld, 2005; Tranet al., 2011). For instance, IDEO, one of the mostwell-known NPD service providers, uses its networkposition to acquire and recombine knowledge fromdisconnected domains and then offers a turn-keysolution to its clients (Hargadon and Sutton, 1997).In contrast, Presans, a French NPD service providerwhose mission is to create a linkage between busi-ness and expertise, has developed X-Search, atool allowing automatic competence and expertisemapping (e.g., from scientific publications, patentsand corporate websites). Through this means,Presans helps its clients identify and establish rela-tionships with experts who have different educationaland professional backgrounds.</p><p>More recently, a new class of NPD service provid-ers has emerged that takes advantage of the increas-ing pervasiveness of Web 2.0 technologies. Theseso-called web-based intermediaries (Colombo et al.,2013) offer their clients the opportunity to access theexpertise and creativity of large communities of firmsand, above all, of individuals active in heterogeneousand geographically distant fields (Jeppesen andLakhani, 2010; Boudreau et al., 2011). For instance,IDEO expanded its business model in 2010 bylaunching OpenIDEO, an online community wherepeople are encouraged to create solutions to someof the worlds toughest innovation challenges.Community members can contribute in a variety ofways, e.g., by submitting inspirational observations,photos, ideas, business models and snippets ofcode.</p><p>It is clear that firms today are exposed to a broadand heterogeneous range of innovation intermedi-aries1 with which they can collaborate along the NPDprocess in an attempt to improve their product inno-vation performance. Nevertheless, there is a lack ofunderstanding of (1) the strategies that different cat-egories of intermediaries use when they interact withtheir knowledge sources and with their clients and (2)the classes of NPD problems they address and thechallenges client firms have to overcome when inter-acting with the service provider (Verona et al., 2006).This understanding would be very important forthose firms that wish to extract the maximum valuefrom their collaboration with an innovation inter-mediary and to design effective policies that fosterthe contribution of innovation intermediaries toindustrial innovation.</p><p>The first objective of this paper is to take a steptoward filling these gaps by developing a typology ofthe strategies innovation intermediaries adopt whenthey interact with their knowledge sources and withtheir clients. Second, this study aims to provide apreliminary understanding of (1) the contributionsdifferent classes of innovation intermediaries maketo the NPD process of their clients by focusing on thecategories of NPD problems they are able to addressand (2) the capabilities firms deploy when theycollaborate with intermediaries adopting differentintermediary strategies. To pursue these goals, anexploratory multiple case study involving four inno-vation intermediaries (i.e., Continuum, MaterialConneXion, Aedo-to and TakeACoder) and 12 oftheir clients is presented after the development of thetypology.</p><p>In order to achieve the above-mentioned researchobjectives, we have organized the paper as follows.The next section briefly reviews the relevant litera-ture. Afterward, the theoretical framework and theresearch methodology adopted in the empiricalanalysis are illustrated. The fifth section presentsand discusses the results of the empirical analysis.Finally, conclusions are drawn, and avenues forfuture research are outlined.</p><p>2. Literature review</p><p>2.1. NPD service providers</p><p>According to Howells (2006), innovation intermedi-aries can be defined as agents or brokers helping toprovide information about potential collaborators;brokering a transaction between two or more parties;acting as a mediator, or go-between, bodies ororganizations that are already collaborating; and</p><p>Gabriele Colombo, Claudio DellEra and Federico Frattini</p><p>2 R&amp;D Management , , 2014 2014 RADMA and John Wiley &amp; Sons Ltd</p></li><li><p>helping find advice, funding and support for the inno-vation outcomes of such collaborations (Howells,2006, p. 720). The role of intermediaries in the inno-vation process has been studied from different per-spectives in various research fields (Howells, 2006):(1) technology transfer and diffusion (Seaton andCordey-Hayes, 1993); (2) innovation management(Hargadon and Sutton, 1997; McEvily and Zaheer,1999); (3) systems and networks (Stankiewicz, 1995;Lynn et al., 1996); and (4) service organizations, par-ticularly knowledge-intensive business services, orKIBS (OFarrell and Wood, 1999; Miles, 2000;Chiesa et al., 2007; Abecassis-Moedas et al., 2012).</p><p>Specifically, innovation management scholarshave paid attention to the brokering role played byinnovation intermediaries. NPD service providers aredefined as organizations that span multiple marketsand technology domains and innovate by brokeringknowledge from where it is known to where it is not(Hargadon, 1998, p. 2). They exploit their uniquemarket position by acquiring knowledge from differ-ent domains, recombining it and delivering it in theform of a solution to firms innovation problems(Hargadon, 1998; Hargadon and Sutton, 2000).</p><p>Prior research shows that NPD service providerscan adopt very different strategies when they interactwith their sources of knowledge (Chiaroni et al.,2008). For instance, Hargadon and Sutton (2000)highlight the brokering role performed by NPDservice providers, while Obstfeld (2005) suggeststhat such intermediaries play a bridging functionby introducing or facilitating interactions betweenparties that would otherwise be disconnected. More-over, some studies have explored the different waysthrough which NPD service providers create valuefor their clients, from increasing product develop-ment speed to offering new and enhanced productattributes (Tran et al., 2011). Similarly, Gassmannet al. (2011) identify three mechanisms throughwhich NPD service providers add value to theirclients in cross-industry innovation processes, whichare called innovation broadener, leverager, andmultiplier.</p><p>According to the best knowledge of the authors,however, no systematic effort has been made topropose a typology of the different strategies NPDservice providers adopt when they interact with theirsources of knowledge and with their clients and todiscuss the implications of each strategy for the inter-action between the intermediary and its clients.</p><p>2.2. Web-based intermediaries</p><p>In the last few years, a new category of innovationintermediaries has emerged that leverages the</p><p>increased pervasiveness of 2.0 web technologies.These are called web-based intermediaries (Colomboet al., 2013), and their mission is to offer their clientsthe opportunity to access the power and creativity oflarge communities of individuals, known as solvers,with educational and professional experience in dif-ferent geographical and disciplinary areas. Severalstudies have shown that these intermediaries can bemore effective than traditional NPD service provid-ers because of their superior ability in leveragingtheir network position (Verona et al., 2006).</p><p>Because of the growing presence of web-basedintermediaries, scholars have started to investigatewhich factors affect their ability to support innova-tion. Among others, Terwiesch and Xu (2008) showthat increasing the number of solvers benefits inno-vation by broadening the search for solutions, there-fore increasing the ability of the intermediary toaccess different knowledge domains. Boudreau et al.(2011) find similar results when analyzing a sampleof 645 innovation problems posted on Topcoder,while Jeppesen and Lakhani (2010) explain that thesuccess of such intermediaries lies in their ability toattract specialized solvers with a range of diversescientific interests.</p><p>Similarly to NPD service providers, research hasdocumented the existence of different strategiesused by web-based intermediaries to access dis-persed knowledge and transfer it to their clients(Chesbrough, 2006; Huston and Sakkab, 2006;Verona et al., 2006; Pisano and Verganti, 2008;Colombo et al., 2013). Despite the importance ofthe topic, however, a typology of these strategies islacking (Verona et al., 2006). Moreover, there is noattempt in the literature to provide an integrative andcomparative view of the approaches adopted by tra-ditional NPD service providers vis--vis web-basedinnovation intermediaries, even though firms con-fronted with an innovation problem and that arewilling to collaborate with an intermediary have twooptions from which to choose, namely, relying on amore traditional NPD service provider or engagingin a collaboration with a web-based intermediary.Therefore, having an understanding of the categoriesof innovation problems, each type of intermediary isable to address, and the capabilities firms have todeploy to improve the chances of the collaborationssuccess is an important aspect for R&amp;D and innova-tion managers today.</p><p>3. Theoretical framework</p><p>According to Hargadon and Sutton (1997), the com-petitive advantage of an innovation intermediary</p><p>Contribution of innovation intermediaries to NPD process</p><p> 2014 RADMA and John Wiley &amp; Sons Ltd R&amp;D Management , , 2014 3</p></li><li><p>depends on both its network position as a brokerand on an organizational memory that allows it toacquire, retain, and retrieve new combinations ofinformation obtained through such a position.(Hargadon and Sutton, 1997, p. 717). This suggeststhat innovation intermediaries use and offer to theirclients two different types of knowledge: (1) know-who, which refers to knowledge about who knowswhat and is a result of their network position(Lundvall and Johnson, 1994) and (2) know-how,which refers to knowledge regarding the perfor-mance of an action and is related to the ability of aninnovation intermediary to access and recombine dif-ferent sources of knowledge to propose a solution toa specific problem (Lundvall and Johnson, 1994;Hargadon and Sutton, 1997). Know-how and know-who represent two forms of tacit knowledge, asdefined by Polanyi (1966), because they are rooted inpractical experience and in social interactions and,therefore, can be transferred only through close rela-tionships with the recipients of this knowledge(Lundvall and Johnson, 1994).</p><p>Due to the challenges sharing tacit knowledgeentails, research has given particular attention to theprocesses innovation intermediaries adopt to transfersuch knowledge to their clients (Hargadon andSutton, 1997, 2000; Verona et al., 2006; Jeppesenand Lakhani, 2010). In particular, research suggeststhat the transfer process can be divided into two mainsteps: (1) access to and acquisition of dispersedknowledge and (2) absorption, implementation anddelivery of this knowledge. In the remainder of thepaper, we label these two dimensions of the inter-mediary process access and delivery. Access capturesdifferences in how innovation intermediaries interactwith their network of knowledge sources, whereasdelivery considers heterogeneity in how innovationintermediaries interact with their clients to bringkn...</p></li></ul>

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