Why Do Experts Solve Complex Problems Using Open Innovation? Evidence from the U.S. Pharmaceutical Industry

Abstract

This article investigates how project expertise and complexity jointly impact the decision to adopt open or closed innovation. It identifies four different types of open innovation models—crowdsourcing, coopetition, science-based, and network—and explores the varying conditions of project expertise and complexity under which firms tend to adopt a particular type. Using large data analysis from pharmaceutical drug development projects, the authors find that complexity moderates the relationship between project expertise and the choice of open or closed innovation and that levels of complexity and project expertise vary between different open innovation models.