Building Absorptive Capacity to Organise Inbound Open Innovation in Low Tech Industries

The discussion on open innovation suggests that the ability to absorb external knowledge has become a major driver for competition. In the case of inbound open innovation, companies screen their environment to search for the appropriate technology and knowledge and do not exclusively rely on in-house R&D. A key precondition is that firms dispose of “absorptive capacity” to internalise external knowledge. For R&D intensive large firms, the concept of absorptive capacity is well understood. In contrast, for small firms and firms operating in traditional sectors, implementing the concept of absorptive capacity is less documented. These firms will have to look for assistance to build their absorptive capacity or even to ‘outsource’ a significant part of this function. This paper, therefore, focuses on the role of collective research centres in Belgium in building absorptive capacity at the intraorganisational dyad level. This type of technology intermediaries are created to help firms operating in traditional sectors to take advantage of the latest technological developments. The aim of the paper is to demonstrate that the trend towards openness of the innovation process forces firms lacking absortive capacity to search for alternative ways to engage in inbound open innovation. The paper highlights the multiple activities of which absorptive capacity is made up; it defines the concept of absorptive capacity as a precondition to open innovation; and it demonstrates how firms lacking absorptive capacity collectively cope with the distributedness of knowledge and innovation.