Managing knowledge boundaries for open innovation - lessons from the automotive industry

Purpose: The shifting locus of innovations from the firm to the supply chain level in the automotive industry has led to an advanced integration of suppliers in New Product Development (NPD). The rising need to innovate and obtain knowledge from more distant knowledge sources calls for new innovation strategies and calls for a better integration of other external actors who lie outside the traditional automotive supply chain. Such an open innovation strategy challenges organizational boundaries both on the firm and supply chain levels, yet our understanding of the functioning of such boundaries and how they can be managed to allow for purposive knowledge flows is limited. Design/Methodology/Approach: In a longitudinal case study we trace the development of the first open innovation network in the German automotive industry over a period of 5 years based on (1) archival data, (2) semi-structured interviews, and (3) field observations. Findings: While the automotive industry is advanced in collaborating with suppliers for innovation, routines for assessing and integrating ideas from sources outside the supply chain are still underdeveloped. We show which knowledge boundaries currently exist which pose obstacles for open innovation initiatives in this industry and how they could be mediated through the involvement of gatekeepers. Originality/Value: We challenge and clarify the notion of the ‘permeability of organizational boundaries’ in the Open Innovation literature and investigate the role of gatekeepers for open innovation. As a mature industry, the automotive industry offers an excellent setting for this research.