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Creating and Capturing Value in Distributed Innovation: Towards a Contingent Model for Solving The Paradox of Creative Destruction

Abstract

The emergence of open standards and the consequent increase in the fragmentation of knowledge flows which are relevant for most of the industries of modern economies has changed the conceptual and practical interpretation of the management of innovation. By building on existing literature on distributed innovation and with a detailed evidence from a set of enlightening case studies, in this paper we gain two results. We first develop a taxonomy of four emerging modes of value creation and capture in the context of distributed innovation. We then analytically discuss the alternative strategic and organizational approaches through two sets of contingencies: (a) the key variables that guide firms to select the optimal model for creating value through distributed innovation; (b) the systems of incentives that help firms to extract value from the different models. In so doing we provide managerial guidance for value creation and capture in the networked world and derive implications for future research on these topics.

Type

Working Paper

Author(s)

Mohanbir Sawhney

Date Published

2006

Citations

Sawhney, Mohanbir. 2006. Creating and Capturing Value in Distributed Innovation: Towards a Contingent Model for Solving The Paradox of Creative Destruction.

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