Sood, Hitu (2020) Exploring Open Innovation in the Biotechnology Industry: A Qualitative Study. PhD thesis, Victoria University.

Abstract

Open Innovation (OI) is a new paradigm in innovation suitable for organisations characterised by Research and Development (R&D), and for organisations that are global and operating in high- technology industries. Although exceedingly relevant to Australian businesses due to the location challenge faced by Australia, to date OI is only sparsely researched in the Australian context. The majority of research published on OI is in the European or American context. This qualitative case study therefore, investigated OI in the Victorian Biotechnology Industry, which meets the characteristics of organisations suitable for OI. The aim of this research is to understand the micro-foundations of OI and its implications from individual managers’ perspective in Biotechnology organisations; and to explore how organisations and individuals can manage these implications. The results of this study show how the implications of OI can be managed at an individual level and also at, the organisational level without heavy investment or major changes. Applying the lens of Knowledge Based Theory of the firm, this research examines the perspectives of various stakeholders on OI in the Biotechnology industry. This research explored individual managers’ interpretation of the OI phenomenon based on their overall experience of OI in their organisations. The interpretivist paradigm enabled an understanding into the reality of the phenomenon as seen by the practitioners of OI. It allowed the Researcher to search for patterns of meaning while describing meanings that the managers assigned to OI; their view of the implications of being open for innovation, and examining how OI was managed in their organisations. The data for this study was collected based on the considerations of theoretical saturation which was achieved from eight Biotechnology organisations in the state of Victoria in Australia. A total of twenty interviews were conducted with ten participants from the eight Biotechnology organisations. In addition, for triangulation, six interviews with five participants from: a Contract Research Organisation (CRO), a premier Australian Research Institute (RI), and an Industry Body (IB) for the Biotechnology industry were conducted. By including a variety of stakeholders from the industry this research is able to present a holistic picture of OI in the Victorian Biotechnology industry. Although a small sample, saturation of information was reached from the rich data that emanated from the semi-structured interviews, analysis of documents collected, and from information posted on websites. The data set was so rich that issues of validity and reliability were easily justified from the analysed data. Literature on OI has suggested that one of the implications of OI is that it requires considerable changes in the policies, processes and systems of organisations. The findings of this research suggest that the nature of the Biotechnology industry is such that it is knowledge intensive, participates in R&D, is technology based, and adopts OI without much effort in change management. OI was viewed as ingrained in the nature of scientific work and not an entirely novel phenomenon within the Biotechnology industry in Victoria. The Biotechnology firms investigated did not have to incorporate any major changes to realise OI, nor required implementing any specific systems, processes or procedures for the management of OI. Consequently, the changes experienced by individuals in these organisations for OI were minimal. The findings of this research, vary from earlier studies on OI in the American and European context that suggest that there are considerable implications due to the ‘not-invented-here’ syndrome. This research instead suggests that there are other implications that need more attention. For the Biotechnology organisations in this research OI promoted greater learning, improved staff morale and more team work. OI also required individuals to balance diverse stakeholder demands, learn better time management and communication, be more open to change as well as overcome ego, fear and distrust while attempting to form external partnerships. Additionally, these research findings suggest that entrepreneurial thinking, team work and cross-disciplinary knowledge are major enablers for OI in organisations. The findings on the implications of OI in terms of the benefits and challenges highlight the dichotomy of saving time and money due to OI while also facing the challenge of risking time and money when working with external partners. To realise the benefits of OI these organisations had to harness the advantages of opposing forces such as: revealing and being open, efficiency and innovation, hierarchy and networks, teamwork and individual accountability, maintaining cost control and ensuring quality, as well as a centralised vision with decentralised autonomy. For individuals in the Biotechnology organisations this meant dealing with these paradoxes. The findings highlight that at an individual level OI can lead to a struggle to manage timelines and resource constraints while striving for quality; learning to balance between disclosure and discretion when interacting with external partners; retrieving internal knowledge while gaining new knowledge; working collaboratively internally and externally while being individually responsible. The findings of this study suggest that OI increasingly requires knowledge exchange while contending with dualities and paradox at both individual and organisational level. Importantly this research highlights that Organisational Fluidity and Agility enables balancing and managing these dualities and paradox. The characteristics of Organisational Fluidity and Agility such as: porous boundaries, fluidity in processes and systems, resource mobility and temporary project teams are useful for OI as determined from the Biotechnology organisations. As these organisations were also Small to Medium Enterprises (SMEs) that are generally known to be responsive and flexible, it is deemed that the overall agility and fluidity of these organisations further provided on-going support for OI. This research confirms that OI was facilitated in these Biotechnology SMEs due to their Organisational Fluidity and Agility at an individual and organisational level. At the individual level, Organisational Fluidity and Agility was supported through the use of flexible processes, systems, roles and responsibilities. This allowed employees to better handle the dual demands placed on their time, knowledge and skills for OI. The contribution this study makes is that OI is closely linked to Organisational Agility and Fluidity, both at the individual and organisational levels. Organisations do not necessarily need to undergo major transformation to gain the benefits of OI. The characteristics of agile and flexible organisations (such as: porous boundaries, fluidity in processes & systems, resource mobility and temporary project teams) appear to facilitate OI in the Biotechnology industry. At the individual level, individuals in Biotechnology SMEs are orientated towards collaboration (internally and externally) due to their scientific training and overall nature of knowledge intensive drug development process. Additionally, the small size and resource constraints of these Biotechnology organisations is the reason for individuals to adopt a more collaborative attitude towards innovation to stay ahead of competition. However, these findings are from one industry compromising of SMEs. Future research is required to explore these findings in other industries.

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