An empirical study of open innovation enabling characteristics in product design

Since the emergence of Open Source Software (OSS) in the early 1980s, OSS has been accepted in certain business sector as a viable system model in the rapid changing technology development. Furthermore, the concept has been extended to Open Innovation that goes beyond software toward creative activities like product design. It is a nature intellectual quest to seek the boundary of this concept so that it can be further extended to new areas and in the mean time, to advance this new concept. In fact, a rich set of literature has emerged to document new open innovative product cases and underlined business models. Most of these studies have come from the innovation process perspective. This research work is taking a different perspective, by investigating the key product characteristics that could impact on the success and failure of applying open innovation. In essence, the objective of this study is to determine what the factors that could enable the engagement of wide participation of various players from different corners of the world into a cohesive creative endeavor. Empirical evidences from feasible OSS and open innovation cases are qualitatively investigated to test two hypotheses of key characteristics in product design: 1) Product variety is positively correlated with the involvement of open innovation in physical product development; 2) Product value density is positively correlated with the involvement of open innovation in physical product development. Testing result shows significant pattern of high variety in innovative products, is conducive to open innovation, in particular, for those products that are based on modularized product structure. However, the positive impact of product value density is not well supported by all the investigated cases. One possible explanation is the difficulty to differentiate open innovation with marketing strategy and others in customers´ willingness to pay price premium. As a conclusion, criteria of products that are suitable for open innovation are suggested, followed by the discussion of research limitation and future study directions