Understanding the advantages of open innovation practices in corporate venturing in terms of real options
Part of the advantages of using an open innovation (compared to closed innovation) in corporate venturing can be explained by applying the real options approach. Open innovation in risk-laden activities such as corporate venturing has the following advantages: i. benefits from early involvement in new technologies or business opportunities, ii. delayed financial commitment, iii. early exits reducing the downward losses, and iv. delayed exit in case it spins off a venture. We furthermore argue that these benefits do not automatically materialize. Innovation firms have to learn new skills and routines to develop the full 'real option'-potential of open innovation practices.
|Keywords||Business opportunities, Corporate venturing, Early involvements, Industrial engineering, Managing uncertainty, New technologies, Open innovation, Real options, Real options approaches, Subsequent investments in innovations|
|Persistent URL||dx.doi.org/10.1109/IEEM.2008.4738011, hdl.handle.net/1765/16712|
|Series||ERIM (Electronic) Books and Chapters|
|Conference||2008 IEEE International Conference on Industrial Engineering and Engineering Management, IEEM 2008|
Vanhaverbeke, W, & van de Vrande, V.J.A. (2008). Understanding the advantages of open innovation practices in corporate venturing in terms of real options. In ERIM (Electronic) Books and Chapters. doi:10.1109/IEEM.2008.4738011