ICT outsourcing, user-driven and open innovation strategies in the generation of new data-based solution

Abstract: The reported empirical findings using survey data from 531 Finnish companies show that for digitalized data-based innovation generated for both firm’s own and market needs, the firm’s ICT-specific absorptive capacity matters more than its general absorptive capacity arising from the firms’ investments in R&D and intangible assets. User-driven innovators differ from companies that do not produce new data-based solutions for their own use in three major dimensions: 1) they tend to use selective ICT outsourcing strategy, 2) they tend to involve more internal units closely to innovation activities and 3) they tend to use wider external knowledge search strategy. In other words, firms using data for producing innovative solutions for their own needs balance their relatively open innovation strategy with the close in-house innovation collaboration among different units, and further employ an ICT strategy that relies selectively on a firm’s own ICT-specific absorptive capacity and external ICT expertise.