External knowledge sourcing and innovation processes in modern economic environment

In an open and digital economy where ICTs, global networks and innovation systems play a key economic role, knowledge used by companies is increasingly gathered using different external sources. Rapidly changing technology enables companies to use new ways to innovate. New innovation processes permit companies to reduce risk and the costs of innovation. New paradigms, called open innovation and co-innovation, allow organizations to remain innovative in a rapidly changing environment. The objectives of this paper are: to provide a better understanding of open innovation and co-innovation paradigms and to suggest instruments for organizations to benefit from co-innovation ecosystem. Internet empowered ICT tools can be the first step for an organization to initiate implementation of a digital strategy. To gain incremental, tacit, organizational knowledge or marketing skills, a new innovation strategy should involve networking through social networks and virtual communities. Digitalization of innovation activities constitutes a new important role for innovation networks and ecosystems, including global innovation networks, as knowledge and technology are no longer owned by a single firm or country. This paper attempts to prepare the theoretical background, for empirical studies on the impact of new innovation processes on company innovation and their competitive advantages. The study is descriptive and analytical, building on the theory and empirical results of previous studies on new, digital innovation models.