Commercialization Strategies of Large-Scale and Distributed Open Innovation

What is it about?

The ability to commercialize products based on distributed innovation is one of the critical challenges of large-scale open innovation. While this issue has been largely investigated in relation to open-source software (OSS), the literature on commercialization strategies of open-source hardware (OSHW) is comparatively scarce, despite OSHW commercialization being more complex. Based on a multi-method exploratory study, this article shows that with OSHW, firms may strategically leverage a “gray area” between closeness and openness to take advantage of OSWH community innovations.

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Why is it important?

------------------------------------------------------- Contribution to Academic Scholarship ------------------------------------------------------- This article shows that devising a successful open-source hardware (OSHW) strategy is more complex than in the case of open-source software (OSS), where firms essentially face a binary choice: become open and leverage it or stay closed and work on your own. Instead, the physical nature of OSHW is such that commercialisation becomes a prerequisite to diffusion of community innovation, which creates a ‘grey area’ enabling firms to commercialise OSHW-based products without themselves becoming open source, provided that they contribute enough to the collective innovation effort. ------------------------------------------------------- Contribution to Management Practice ------------------------------------------------------- Managers wishing to leverage open-source hardware innovation should not try to replicate the well-known and trusted OSS strategies – simply abiding by the OSHW licence when commercialising OSHW-based products may backfire if the product is deemed not innovative enough – ‘clones’ of OSHW products are seldom tolerated. Conversely, managers should be aware of the possibility of a ‘midway’ strategy enabling them to both commercialise OSHW-based products and retaining proprietary IP, provided that they contribute significantly, directly or indirectly, to the innovation effort. ---------------------------- Author Perspective ---------------------------- The ability to commercialise products based on distributed innovation is one of the most critical challenges of large-scale open innovation. While this issue has been largely investigated in relation to open-source software (OSS), the literature on strategies of commercialisation of open-source hardware (OSHW) is comparatively scarce. Yet, the specificities of OSHW, in relation to innovation, diffusion, and adoption costs, are such that commercialisation, which is purely optional for OSS, is a far more complex issue, which is why we decided to investigate how the specificities of OSHW influence the commercialisation strategies used by firm to leverage OSHW innovation communities.