Overcoming “Imperfections” of Technological Change: the borderless nature of risk in Open Innovation Model

Growth in the economy, changing consumer preferences, the climate for labour relations and most technological progress are all exogenous events, part of an external environment to which an organisation reacts and which it does not fully control. These events all highlight the borderless nature of risk. To ensure the success and progression of business, entrepreneurs require the ability to seize the opportunities identified and avert the threats presented by the external environment. Alongside businesses pursue to actively foster innovation. Entrepreneurs thus aim to develop innovative approaches and ideas through establishing both formal and informal relationships and connections. These relationships take the form of collaborative partnerships both internal and external to the organisational network. This can be seen through partnerships with research centres, consultancy groups, other organisations and universities among others. However, unless effectively managed such collaborations and partnerships could be constrained through a variety of factors.

Imperfections as risk management, asymmetric information, and hold-up problem, all stand to disrupt these collaborative partnerships and limit opportunities for innovation. In order to address these issues, this research seeks to how an entrepreneur overcomes these imperfections adopting open innovation model. Therefore an holistic case study will be presented to offer a deep, real story of a business in UK.