Pia Hurmelinna-Laukkanen

Nature and dynamics of appropriability: strategies for appropriating returns on innovation

The appropriability regime represents a combination of available and effective means of protecting intangibles and innovations, their profitability, and the increased rents due to research and development. It has a central role in appropriating returns on investment, but the nature of appropriability and the strategies for appropriation may not be fully known to managers, or even to researchers. The aim in this study, therefore, is to categorise the appropriability regime by extending, combining and complementing previous research. We also conducted a survey among 299 companies in order to determine the roles, availability, strength and efficiency of appropriability mechanisms. Such mechanisms offer institutional protection in the form of intellectual property rights, contracts and labour legislation, tacitness of knowledge, lead-time, practical secrecy and human-resource management. As a result, we suggest a conceptual clarification of the appropriability regime, and offer empirical evidence to increase understanding of the appropriation of returns on innovation.

Appropriability Regime for Radical and Incremental Innovations

In the present day markets, new product development and innovation are essential for value creation. Innovation, however, hardly provides benefits if rivals are able to copy it with little or no extra cost. Consequently, being able to build an appropriability regime that provides effective protection against imitation and enables getting returns on investments in innovation is necessary. The problem is that choosing the methods to protect different kinds of innovations is not straightforward. In this paper we study appropriating from radical and incremental innovations. It is widely known that many significant differences exist between the two innovation types, and the appropriability conditions are no exception. Empirical evidence on the topic is provided by analyzing survey data collected among 299 companies. As a result, the effects of environmental dynamism and research and development (R&D) intensity on radical and incremental innovation are illustrated, and knowledge is provided on the role of the appropriability regime in enhancing the potential to profit from radical and incremental innovations.

Intellectual capital in service‐ and product‐oriented companies

Purpose – As service companies are occupying an increasingly significant place as drivers of economic growth, there is a pressing need to understand their peculiarities in order to facilitate their effective management and governance. One important area in which this kind of understanding is lacking is intellectual capital (IC) and knowledge management. Although intellectual capital has become the key value driver for all types of organizations, there is a lack of systematic research on whether there are fundamental differences in the IC of service‐oriented versus product‐oriented companies. In an attempt to bridge this gap the paper aims to examine the main differences in IC stocks, creation, management and protection mechanisms between service‐oriented and product‐oriented companies.Design/methodology/approach – The analysis is based on empirical evidence collected from 418 respondents representing HR and R&D functions in 335 Finnish companies.Findings – The results demonstrate that service‐oriented com...

Tug of war in innovation - coopetitive service development

Innovative new services are increasingly being developed in close collaboration between different organisations. As part of this development, competing firms have started collaborating with each other. These firms face new challenges arising from the service context and the existence of competitive tensions. We present an explorative case study of Finnish mobile TV service development with a focus on inter-firm coopetition (simultaneous competition and cooperation). Our results carry implications in terms of the nature, the challenges and opportunities involved, and of the management of coopetitive service development.

WHAT'S SMALL SIZE GOT TO DO WITH IT? PROTECTION OF INTELLECTUAL ASSETS IN SMEs

The knowledge protection/sharing dilemma related to innovation activities is becoming known to all firms, even though it is generally more notable for SMEs: the small size of the firms inherently creates a need for inter-organizational collaboration, but it also makes dealing with the related contradictories more challenging. One factor behind this is that the needed tools — such as the protection mechanisms of intellectual assets — may be more limited. In line with this notion, we examine the protection available for and used by small firms in their innovation activities. We approach the issue by conducting a review on the relevant literature, and use a qualitative multiple case study conducted in eight small companies to empirically study the issue. Departing from prior research, we consider protection of innovations by distinguishing between the intangibles needed in innovation activities and the actual innovation outputs, and combine these considerations to the knowledge protection/sharing dilemma.

Protection for profiting from collaborative service innovation

Purpose – Profiting from service innovations can be challenging. It is not only a question of pricing and marketing the services appropriately, but also of keeping competitors from imitating them. The purpose of this paper is to discuss how service innovation differs from technology/product innovation in terms of protection, and how this shows in collaborative innovation activities.Design/methodology/approach – The paper offers a literature review combining discussion related to service research and strategic management. Empirical evidence is provided in the form of a multifaceted case study illustrating some of the aspects of collaborative service innovation.Findings – The results indicate that characteristics separating service innovations from product or process innovations influence the efficacy of protection. This, in turn, may make or break the subsequent value appropriation. Furthermore, as service innovation typically includes collaborative activities, there is another twist to protection: compani...

Coordination in innovation‐generating business networks – the case of Finnish Mobile TV development

Purpose – In this study the authors seek to discuss and empirically analyze coordination mechanisms in innovation‐generating business networks. Their aim is to explore how these coordination mechanisms, as well as the roles of actors, evolve during the development of such networks.Design/methodology/approach – The paper analyses an in‐depth single case study on the development of Finnish Mobile TV in an innovation‐generating business network comprising a heterogeneous range of actors.Findings – The findings suggest that coordination of innovation‐generating business networks combines “management” and “orchestration”, both of which have their distinct roles throughout the development of the network. The latter is used throughout the case in question to communicate vision and build social capital, and the former to coordinate phases closer to commercialization.Research limitations/implications – The study provides novel evidence in explicating how network coordination mechanisms of management and orchestrat...

Enabling collaborative innovation – knowledge protection for knowledge sharing

Purpose – Collaboration for research and development (R&D) and innovation among various organizations can be beneficial and in some cases even imperative, but in order to realise the potential, effective management is required. Effective innovation requires firms to share their core knowledge, and simultaneously make sure that they will not lose their core knowledge and future competitive advantage. In line with this, this study aims to clarify the role of knowledge protection in relation to collaborative innovation endeavours.Design/methodology/approach – This study approaches the knowledge protection and knowledge sharing issues through a literature review and subsequent empirical analysis of 242 Finnish companies.Findings – The results indicate that when a firm has put effort in getting strong protection at its disposal, sharing knowledge with varying partners is more likely, which, in turn, improves innovation performance of the firm. It is not just about the strength of protection, but also – and eve...

Constituents and outcomes of absorptive capacity – appropriability regime changing the game

Purpose – Recent research and practice have put a great deal of effort into finding efficient ways of managing and organizing to promote innovation within organizations. This study aims to continue this trend in addressing issues related to knowledge transfer and protection through examining roles of absorptive capacity and appropriability regimes and the interplay between them. An appropriability regime can play a dual role when external knowledge and the knowledge‐base of the firm form the basis for absorptive capacity, which then contributes to innovation performance.Design/methodology/approach – The study provides an empirical examination of the direct and moderating roles of appropriability regime regarding the above‐mentioned dual role. Data collected from 335 firms was utilized to perform regression analyses.Findings – The empirical evidence suggests, first, that the strength of the appropriability regime has a positive effect on absorptive capacity (especially the acquisition of knowledge) togethe...

DO SMEs BENEFIT FROM HRM-RELATED KNOWLEDGE PROTECTION IN INNOVATION MANAGEMENT?

In terms of innovation generation and management, creative employees are the most valuable resources in small firms. Thus, knowledge leaking and leaving are the major staff-related risks. Protecting HRM-related knowledge is one effective way of dealing with these challenges, although this is not always acknowledged by academics or by managers. It is particularly valuable in safeguarding the existing background knowledge of the firm, and thus the prerequisites for future innovation. The aim in this study is to shed light on what is a somewhat neglected protection and appropriability mechanism, and thus to enhance understanding of the role of HRM in protecting core company knowledge—especially in SMEs. These issues are explored in a review of the latest literature and a case study of 15 SMEs representing three industries. The theoretical contribution of the study is to introduce and empirically test a typology of five HRM-related knowledge-protection mechanisms: recruitment, education and training on matters of confidentiality, retaining employees, capturing and diffusing knowledge in-house, and monitoring.