Exploring Open Innovation Strategies via Simulation.

Taking a knowledge-based approach to innovation, we distinguish between four different innovation strategies that vary in how knowledge is sourced and exploited - Open Innovation (OI), Closed Innovation, Outbound OI, and Inbound OI. We build an agent-based simulation model to explore the competitive performance profiles of these strategies as well as their innovation creation potentials. Our simulation research allows for modeling the micro-foundations of open innovation and for studying innovation strategies in different market conditions. We find that the relative financial payoffs associated with the different innovation strategies vary with time - some strategies win out in the short-term others in the long-term. The results also suggest that there is a trade-off between a strategic orientation based on innovativeness versus one based solely on financial returns. [ABSTRACT FROM AUTHOR]