Open search strategy, appropriability strategy and cognitive proximity:evidence from the United Kingdom science and technology parks

Abstract

Although the general picture in the open innovation literature is that open innovation practices have mainly positive consequences for the large enterprises, an emerging research strand recently has started to examine the potential consequences of inbound and outbound open innovation activities for smaller firms. Nonetheless, there is scant evidence in the literature about the extent and magnitude of the effect of open search practices on small firms. For smaller firms, their liability of smallness presents several challenges, such as: lack of internal resources and competences, lack of financial resources, as well as, limited multidisciplinary competence base, weak appropriation strategy, which all is resulting in unstructured approaches to innovation, suffering from the not invented here syndrome, and leaving them with only few technological assets to bargain with. This has led to the conclusion that smaller firms' ability to engage in open search activities is constrained. In this thesis, several theoretical perspectives from the multiple domain literature were employed in three separate studies, and using data collected from 342 micro- to medium-sized enterprises located in science and technology parks in the United Kingdom, to explore the black box of interplay between open search strategy, appropriability strategy, intellectual capital environmental dynamism and performance. Hence, the main objective of this thesis was to explore the potential dynamics of co-creation in ecosystem of science and technology parks, being generated by a range of co-specialisation and co-evolution opportunities among the tenant firms, and between them and other stakeholders, that are associated with the development of innovation architectures in onsite firms. The first study, by introducing a construct of open search strategy, explored central questions related to the simultaneous connections between distinct types of open search strategies and the onsite firms' ability to exhibit superior levels of performance, and whether spatial and cognitive proximities in their network relations matter. The results suggested that onsite firms' open system performance was associated with offsite market-driven, science-driven, and technical and application-driven open search strategies. The results further revealed that onsite and offsite market-driven, science-driven, technical and application-driven driven and institutional open search strategies exerted positive influences on onsite firms' rational goal performance. The second study was motivation by a desire to understand the roles of open search and appropriability strategies in co-evolution of dynamic capabilities - social, human and organisational capital - in onsite firms, as well as the role social capital plays in strengthening the process of human capital and organisational capital accumulation. The study found that onsite firms' overall open search strategy positively influenced the accumulation of social, human and organisational capital. Further, it illustrated that onsite firms' appropriability strategy had a positive impact on their ability to extract positive incremental returns from social proximity. In addition, it was revealed that higher levels of social capital positively associated with higher levels of human and organisational capital. The results also indicated that there might be a mediating effect of social capital by which onsite firms could benefit from their open search and appropriability strategies, and develop and manage their human capital and organisational capital. The goal of the third study was to examine the coasts and benefits of difference appropriation mechanisms by investigating how perceived environmental dynamism affects the appropriation of rents from the coopetitive and cooperative market-driven open search activities. The results suggested that both formal and informal appropriation mechanisms positively influences rational goal performance in onsite firms. In addition, both onsite and offsite market-driven strategies were found to be associated with onsite firms' strategic focus on informal and formal appropriation mechanisms, while only offsite market-driven strategy was found to be associated with the use of formal appropriation mechanisms. The study also illustrated that environmental context plays a key role in influencing whether firms' appropriability strategies lead to more open search activities or not. Furthermore, my results showed that environmental dynamism positively moderated the impact of informal appropriation mechanisms on both onsite and offsite market-driven open search strategies. In contrast, environmental dynamism negatively moderated the impact of formal appropriation mechanisms and onsite market-driven open search strategy.