Internal and External Collaboration in New Product Development:The Effects of Innovation Strategy

Industry and academia alike are increasingly becoming aware of the fact that innovation does not take place in isolated cells or functions within the firm. During the last the years the term open innovation has emphasised the importance of internal and external collaboration in order to increase the competitiveness of companies. Although the idea of involving internal and external actors in the new product development (NPD) process is not new, the knowledge about the benefits and pitfalls is still limited. This paper aims to contribute to refining the concept of open innovation, by investigating how strategic priorities influence the degree of external and internal involvement in the NPD process, moderated by contextual factors. Results based on analyses of 584 companies from the International Manufacturing Strategy Survey (IMSS) 2005 indicate that suppliers are heavily involved in the NPD process in firms in B2C markets aiming at increasing the innovation volume. For B2B companies the reverse picture emerges. However, when the aim is to increase the radicality of new products, suppliers and customers are heavily involved for firms in B2B markets. Further, market uncertainty, and to some extent company size, seems to moderate the relationships between strategy and involvement considerably.