Advocacy groups help solving grand challenge problems

Grand challenges are among the most complex problems for modern societies. Many governments and foundations provide substantial resources to encourage the search for solutions. Due to the significance of these problems, organizations often form partnerships in what we call search consortia to engage in joint search and compete for funding. Prior research on joint search highlights the role of specialized organizations, mainly regarding technological domains, to identify a superior solution. However, stakeholder theory leads us to believe that the success of any solution depends on the acceptance and support of important stakeholders. In a new study, which will be published in the Academy of Management Journal, Anders Ørding Olsen, Wolfgang Sofka and I suggest that search consortia are more likely to receive funding when they include representatives of stakeholder concerns, so-called advocacy groups. We extend theory on coordinated exploration in joint search by integrating mechanisms from stakeholder theory and argue that advocacy groups improve the generation of potential solutions and provide legitimacy. We test our theory with a unique dataset of 35,249 consortia that proposed solutions to 2,349 grand challenge problems as part of a large European funding program. Our results show that advocacy groups benefit search consortia, particularly when consortia exhibit a high dispersion of technological knowledge and when they are inexperienced.

Search strategies can be complementary – but only under certain conditions

Extant research has characterized a firm’s search for external knowledge in its innovation activities as either relational or transactional in nature. The former implies that a firm chooses and develops collaborative relationships with knowledge sources like universities, customers or suppliers, while the latter suggests transactions governed by markets for technology. Together with Wolfgang Sofka of Copenhagen Business School, we argue that prior literature has ignored that both search strategies are interrelated and complementary: adopting one strategy has a higher marginal return on innovation performance if the other one is present. Moreover, we suggest the benefits from complementarity to be higher when a firm is more distant to the technological frontier in the industry and when markets for technology in that industry are shallow. We test our hypotheses on a sample of 3,921 German firms from 2001 to 2009 and find support for our hypotheses. The results of our study have been published in Research Policy.

How to measure business model innovation with CIS data?

The Community Innovation Survey (CIS) which is coordinated by Eurostat and carried out in all EU member states and associated countries has been a rich source of data for many research projects that seek to investigate firms’ innovation activities. Innovation in the CIS is, according to the Oslo Manual of the OECD, categorized as product, process, organizational or marketing innovation. This categorization has been criticized a lot for not adequately reflecting more comprehensive innovation activities such as business model innovation. Business model innovation has received considerable academic attention in the recent past, yet it is notoriously difficult to actually measure the degree to which a firm has innovated its business model. In a new article, which has been published in the 2015 edition of the Advances in Strategic Management series, we seek to bridge the desire to measure business model innovation and the possibilities that CIS data offer. Based on a multi-stage expert rating process, we identified CIS questions that are related to business model innovation. The result is a count variable that sums up the number of components of a business model that were subject to innovation during the survey period. We experimented with more or less strict definitions of components as being relevant for a firm’s business model. While it is certainly not a perfect measure, it is an attempt to apply a new concept to a wealth of data which allows comparisons across time and country.


Industrial funding discourages researchers to be open

Together with my colleagues Dirk Czarnitzki (KU Leuven), Maikel Pellens (ZEW Mannheim) and Andy Toole (US Patent and Trademark Office), I have recently looked into the relationship between the degree to which a university scientist’s research is funded by research and his or her commitment to open science. We have investigated this issue in two papers, published in Industrial and Corporate Change and the Journal of Technology Transfer, and the findings have recently been featured by Research Europe where you can read the full blog article. In a nutshell, we find that industry funding is associated with a delay or even a ban of the publication of research results. Moreover, university scientists receiving industry funding are less open, i.e. they are reluctant to share research materials, data and other inputs, but they are also more likely to be denied access to such research inputs from others. Although entrepreneurial universities are an important policy goal, our results highlight the potentially negative consequences of industry funding.