Suppliers versus start-ups: Where do better innovation ideas come from? |
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| Institution: | 1. University of Bayreuth, Faculty of Law, Business and Economics, Chair of Marketing and Innovation, Universitätsstr. 30, 95447 Bayreuth, Germany;2. University of Twente, Faculty of Behavioural, Management and Social Sciences, Department of Technology Management and Supply, P.O. Box 217, 7500 AE Enschede, the Netherlands;1. Technology Entrepreneurship and Innovation, Mads Clausen Institute, University of Southern Denmark, Alsion 2, DK-6400 Sønderborg, Denmark;2. TUM School of Management, Technische Universität München, Arcisstraße 21, 80333 München, Germany;1. Université de Strasbourg, CNRS, BETA UMR 7522, F-67000 Strasbourg, France;2. LIST, Luxembourg Institute of Science and Technology, 5, Avenue des Hauts-Fourneaux L-4362 Esch/Alzette, Luxembourg;1. A.B. Freeman School of Business,Tulane University, New Orleans, LA 70118, USA;2. LeBow College of Business, Drexel University, Philadelphia, PA 19104, USA;3. Naveen Jindal School of Management, University of Texas at Dallas, Richardson, TX 75080, USA;1. Ecole Polytechnique Fédérale de Lausanne (EPFL), College of Management, Switzerland;3. Université Paris Nord – Centre d’Economie de l’Université Paris Nord (CEPN), France;1. VMI-group, Gelriaweg 16, 8161RK Epe, The Netherlands;2. Department of Operations Management, ESSEC Business School, Avenue Bernard Hirsch 3, 95021, Cergy Pontoise, Paris, France |
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| Abstract: | In the innovation process of firms, suppliers increasingly play a key role as external sources of ideas. Although the beneficial impact of supplier integration has been acknowledged, there is also evidence that not all such innovation efforts are successful, particularly regarding the identification of truly innovative solutions. Therefore, in recent years, large firms have begun to move beyond their existing supply base, drawing on innovation ideas from start-ups, that is, with young firms with whom they have no pre-existing bonds. Yet there is no empirical evidence regarding whether start-ups’ ideas actually outperform those of established suppliers. We address this question by presenting a unique, real-world comparison of 314 supplier and start-up ideas – ideas that were identified, evaluated, and followed up over the course of an open innovation initiative conducted by a large automotive manufacturer. We find that start-ups’ ideas are characterized by a higher degree of novelty and to some extent higher benefit for end customers but, on the downside, are less likely to be implemented than suppliers’ ideas. Overall, our study adds new dimensions to the discourse on open innovation and provides valuable insights regarding the outcome of supplier and start-up involvement in the front end of the innovation process. |
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| Keywords: | Open innovation Search for external knowledge Supplier integration Start-ups Idea quality Fuzzy front end |
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