When to open up the innovation process: Before or after product launch?

Does it matter when to open up the innovation process? In order to answer this question, Simon Jang (of the University of Cardiff) and I analyzed the product development strategies and market performance of 536 digital games launched by 265 developers over a period of 14 months. Specifically, we investigated the effect of opening the product innovation process before product launch (during new product development) and after product launch (product extensions and upgrades).

The main result is that firms should, in general, prioritize early open innovation over late open innovation. However, this depends on the complexity of the product, and on the firm’s technological and marketing capabilities. For instance, a firm with superior marketing capabilities may be better off conducting an NPD project in a fully closed innovation configuration. The same result was found for highly complex NPD projects. Firms with high technological capabilities tend to benefit more from partial or fully open innovation processes. As a conceptual take-away, we describe four possible inter-temporal NPD strategies that firms can choose from when executing innovation projects.

The study is open-access and can be found here.