Comparing Outside-In, Inside-Out, and Coupled Open Innovation Knowledge Flows

OVERVIEW: Open innovation can comprise three types of knowledge flows—namely, outside-in, inside-out, or coupled—where each involves different sets of activities. Based on a survey of managers in US firms within innovation-forward industries, our findings reveal that companies are using all three types and that better-performing firms use open innovation much more than poorer-performing firms. We found coupled open innovation to be more prevalent than outside-in open innovation—with the latter being traditionally associated with open innovation. Inside-out open innovation also appears to have garnered attention. The results further show that, on average, product innovation firms rely more on open innovation activities than do service innovation firms, though better-performing product firms and better-performing service firms reflect similar use levels. Poorer-performing service firms are particularly notable for their lower use of open innovations. Our findings confirm that open innovation is not a single uniform amalgamation of activities nor one generalized type of knowledge flow. We suggest a more granular portrayal of open innovation—one that consists of a combination of outside-in, inside-out, and coupled activities for catalyzing different knowledge flows that uniquely benefit performance.