Finally, we define innovation partnerships as arrangements that can be short or long
term, depending on the focal issues being considered. As described in the sections
below, innovation partnerships as an approach is rooted in the broad theories of open
innovation and innovation systems.
3.2 Open Innovation and Innovation System Theories
Traditionally, innovation has been conceived as a closed activity – being driven and
controlled internally by innovating firms in the private sector and knowledge
institutions (e.g. universities, research centres) in the case of science-driven innovation. Following this approach, innovating organisations are expected to generate
their own ideas and transform them into business opportunities on their own (and
using their own resources). Over the past decades, “open” innovation has emerged as
a new perspective on innovation, based on the assumption that innovating organisations can and should use internal as well as external ideas (and other resources) and
internal and external paths to market. This means that internal ideas can be taken to
market through external channels, but ideas can also start outside the firm’s own labs
and move inside [24]. Thus, in today’s globalised world, organisations no longer
develop innovations in isolation; they partner with other organisations to develop
innovations which they would hardly realise without the supplement of resources of
a network of actors [25]. It should be emphasised that while innovation in the private
sector is generally driven by the desire to remain competitive in the market and
increase profits, the main driver for public sector innovations is to create greater
public value or improvements in the public sphere – e.g. by introducing new
working practices and approaches (such as citizen participation in government projects, devolution of decision-making powers).
The open innovation literature acknowledges partnerships as an excellent way to
innovate cost-effectively and time efficiently [26]. In line with the resource-based
view (RBV) (more specifically the knowledge-based view) of the firm [27, 28],
“open innovation” as an approach acknowledges that companies in an industry (such
as the water sector) are heterogeneous regarding the resources they possess and that
this heterogeneity is partially preserved by the difficult mobility of these resources.
A firm’s resources fall into two categories, material and immaterial, and they
span from all assets to capabilities, organisational processes and knowledge that it
uses strategically to gain competitive advantage [27]. Organisational knowledge
(e.g. embodied in its staff and systems) is considered to be the most strategically
important resource and enabler of innovation, particularly tacit knowledge which is
generally difficult to imitate by competitors [28]. Under these circumstances, it is
argued that innovation partnerships enable partnering firms to overcome the resource
immobility problem. Partnerships are essentially crafted and executed to allow
resource flows between organisations and, as such, create new entities with strengthened innovation capabilities [29, 30]. Thus, in selecting innovation partners, companies ought to carefully examine the extent to which their resources will be
Promoting Smart Water Systems in Developing Countries Through. . .
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term, depending on the focal issues being considered. As described in the sections
below, innovation partnerships as an approach is rooted in the broad theories of open
innovation and innovation systems.
3.2 Open Innovation and Innovation System Theories
Traditionally, innovation has been conceived as a closed activity – being driven and
controlled internally by innovating firms in the private sector and knowledge
institutions (e.g. universities, research centres) in the case of science-driven innovation. Following this approach, innovating organisations are expected to generate
their own ideas and transform them into business opportunities on their own (and
using their own resources). Over the past decades, “open” innovation has emerged as
a new perspective on innovation, based on the assumption that innovating organisations can and should use internal as well as external ideas (and other resources) and
internal and external paths to market. This means that internal ideas can be taken to
market through external channels, but ideas can also start outside the firm’s own labs
and move inside [24]. Thus, in today’s globalised world, organisations no longer
develop innovations in isolation; they partner with other organisations to develop
innovations which they would hardly realise without the supplement of resources of
a network of actors [25]. It should be emphasised that while innovation in the private
sector is generally driven by the desire to remain competitive in the market and
increase profits, the main driver for public sector innovations is to create greater
public value or improvements in the public sphere – e.g. by introducing new
working practices and approaches (such as citizen participation in government projects, devolution of decision-making powers).
The open innovation literature acknowledges partnerships as an excellent way to
innovate cost-effectively and time efficiently [26]. In line with the resource-based
view (RBV) (more specifically the knowledge-based view) of the firm [27, 28],
“open innovation” as an approach acknowledges that companies in an industry (such
as the water sector) are heterogeneous regarding the resources they possess and that
this heterogeneity is partially preserved by the difficult mobility of these resources.
A firm’s resources fall into two categories, material and immaterial, and they
span from all assets to capabilities, organisational processes and knowledge that it
uses strategically to gain competitive advantage [27]. Organisational knowledge
(e.g. embodied in its staff and systems) is considered to be the most strategically
important resource and enabler of innovation, particularly tacit knowledge which is
generally difficult to imitate by competitors [28]. Under these circumstances, it is
argued that innovation partnerships enable partnering firms to overcome the resource
immobility problem. Partnerships are essentially crafted and executed to allow
resource flows between organisations and, as such, create new entities with strengthened innovation capabilities [29, 30]. Thus, in selecting innovation partners, companies ought to carefully examine the extent to which their resources will be
Promoting Smart Water Systems in Developing Countries Through. . .
173