Sourcing Innovation in the Digital Age

Abstract

This paper introduces a recent innovation survey, the first of its kind in the Digital Age. With coverage of 300 large firms, sampled to be representative of corporate innovation in eight countries, the survey provides a unique look at how innovation, particularly digital innovation, is being sourced by firms around the world. We find that open innovation at these companies is pervasive, but also recent. Only in the 2010s have many firms started innovating with external partners like universities, third-party experts, startups, or crowd. Overwhelmingly, firms use these new external innovation sources for digital technologies where they have internal capability shortfalls. Despite the remarkable growth in the use of external innovation sources, internal innovation sources remain more important for companies. These internal sources also produce the projects most likely to provide a competitive advantage.