Innovating within the system: the simulation model of external influences on open innovation process

Innovation research has been widely concerned with defining the process of new product development and factors influencing innovativeness. On the other hand, the open innovation research also started to look at what are the environments where openness brings higher benefits. In this paper, we introduce the system dynamics simulation model to analyse how such external factors as markets for technology, IPR and appropriability regime as well as speed of market reactions and user needs changes are influencing innovative output of the firms inside one industry. The results show that, e.g., average speed of market and rather high IPR protection level increase amount of technologies introduced to the market. Additionally, the market speed change has a positive impact on new products introduction to the market; however after increasing to the certain point, the market speed becomes too high for product development to cope with, demonstrating the need for balance.