An exploration of the extent to which open innovation is transferable to the retail industry.

The objective of this dissertation is to explore the open innovation paradigm in the context of the retail industry. Open innovation is an emergent concept and has not been as widely researched as other theories in the field of business management. The main idea behind the model is to accelerate the innovation process by acquiring knowledge from external sources, as well as commercialising internal ideas outside the boundaries of the firm. While much of the existing literature applies the model to research-intensive industries, limited research has been conducted to study the concept within the scope of retailing. As traditional industries are characterised by limited research intensity and innovation capacity, an open approach may provide potential opportunities to gain competitive advantage. The study is based on secondary data from academic journals and trade publications, as well as semi-structured interviews with six professionals from the fields of open innovation and retail innovation. Furthermore, open innovation practices of research-intensive organizations were compared to those of retailers, in order to discern a pattern in the type of open innovation processes. The research-intensive companies were drawn from the ICT, FMCG, chemical, and pharmaceutical industries, whereas, the retail companies consisted of leading department stores, grocery food retailers, and specialty retailers. The results showed that open innovation is indeed transferable to the retail industry. However, the observed open innovation practices do not capture the full scope of the concept. While the companies in the study were actively sourcing external knowledge, exploiting internal innovations outside the company boundaries is not yet relevant to retailers. This may be explained by the underdeveloped innovation capacity in this sector and suggests further research is needed for industry-specific factors of open innovation