See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/320263236

Co-Innovation: A Review and Conceptual Framework

Article  in  International Journal of Business Innovation and Research · January 2018

DOI: 10.1504/IJBIR.2018.10016527

CITATIONS READS

2 809

2 authors:

Harriman Saragih Jacob Tan

Universitas Prasetiya Mulya Universitas Pelita Harapan
8 PUBLICATIONS   4 CITATIONS    15 PUBLICATIONS   5 CITATIONS   

SEE PROFILE SEE PROFILE

Some of the authors of this publication are also working on these related projects:

The Journal View project

All content following this page was uploaded by Harriman Saragih on 03 February 2019.

The user has requested enhancement of the downloaded file.

Int. J. Business Innovation and Research, Vol. 17, No. 3, 2018 361

Co-innovation: a review and conceptual framework

Harriman Samuel Saragih*

Prasetiya Mulya University,
School of Business and Economics,
BSD City Kavling Edutown I.1,
Jl. BSD Raya Utama, BSD City, Indonesia
Email: harriman.saragih@pmbs.ac.id
*Corresponding author

Jacob Donald Tan

Universitas Pelita Harapan,
Jl.M.H. Thamrin Boulevard 1100, Tangerang,
Banten, 15811, Indonesia
Email: jacob.tan@uph.edu
Email: tanjacob2002@yahoo.com

Abstract: This paper investigates the previous theoretical and empirical studies
regarding the current philosophical understandings of co-innovation and
subsequently suggests a theoretical framework that exhibits the analytical
pillars and the possible outputs of this notion in practice through various case
studies. The analysis of this study involved examining secondary sources of
scholarly literature by discussing the conceptual understandings and empirical
findings on the concepts of co-innovation in several academic databases.
Co-innovation is defined as a shared work of generating innovative and
exceptional design conducted by various actors from firms, customers, and
collaborating partners. This study proposes that there are five principal
elements within the idea of co-innovation: collaboration, coordination,
co-creation, convergence and complementary. The possible outputs of
co-innovation can either be a new business model, new customer base, new
customer value, new value chain, or new products and services. This paper
attempts to evaluate the emerging concept of co-innovation and propose a
conceptual framework rooted in various authentic business cases and
theoretical literature.

Keywords: innovation; open innovation; co-innovation; collaboration;

coordination; co-creation; convergence; complementary; review; conceptual
framework.
Reference to this paper should be made as follows: Saragih, H.S. and Tan, J.D.
(2018) ‘Co-innovation: a review and conceptual framework’, Int. J. Business
Innovation and Research, Vol. 17, No. 3, pp.361–377.
Biographical notes: Harriman Samuel Saragih is a PhD candidate in the
School of Business and Management, Bandung Institute of Technology. He
currently serves as a faculty member at the School of Business and Economics,
Universitas Prasetiya Mulya. His primary research interests are in the field of
collaborative value creation and co-innovation in the music industry. He has
been actively involved in emerging research on the music business. His articles

Copyright © 2018 Inderscience Enterprises Ltd.

362 H.S. Saragih and J.D. Tan

have been published in International Journal of Business Innovation and

Research, Asia Pacific Journal of Marketing and Logistics, and International
Journal of Innovation Science.

Jacob Donald Tan is a faculty member of Business School Management at the

Universitas Pelita Harapan (UPH). He received his Bachelor’s and Master’s in
Business Administration from the Dallas Baptist University. He is currently
undertaking his Doctoral in UPH Doctor of Research in Management (DRM)
program. His professional experiences include the following: Manager of a real
estate management company in Dallas, Director and Manager of international
schools in Jakarta and Director of a commodities and minerals trading company
in Indonesia. His core expertise of teaching and research are in the scope of
family enterprise, entrepreneurship, and strategic management. He is active in
the ushering ministry as the Team Leader and was the Ushering Coordinator of
Jakarta International Christian Fellowship (JICF) in CIMB Sudirman. He is
also an active member of INTI Young Entrepreneurs Council (YEC).

1 Introduction

Studies that aim to exemplify the philosophy and applicability of co-innovation have
been multiplying in the past years (Bossink, 2002; Beelaerts and Santema, 2006;
Parmentier and Mangematin, 2011; Lee et al., 2012; Vesterberg, 2014; Bitzer and
Bijman, 2015; Botha et al., 2015; Bugshan, 2015). These literature have revealed both
theoretical and empirical findings in various business contexts. In this paper, we discover
the need to contribute in the co-innovation streams to suggest a generic conceptual
framework that illuminates readers of the current understandings in co-innovation, its
conceptual antecedents or logical constructs, and the possible outputs out of this notion.
However, this study argues that to date, there have been no studies that have
presented a conceptual framework of co-innovation that could act as guidance for
industry practitioners in implementing such concept. This paper is therefore aimed at
bringing forward a framework which contains the five co-s of co-innovation as a general
theoretical point of departure to be utilised by firms in the market. This research will be
based on previous studies carried out by various scholars in different fields.
This paper will first provide a succinct overview as to why businesses shift towards a
collaborative action between firms and customers from service-dominant logic (SDL)
(Vargo and Lusch, 2004). Then we continue to discuss value innovation before advancing
further into co-innovation (Kim and Mauborgne, 1997). We argue that it is important to
mainly denote and emphasise the preceding concept of innovation that tends to be
slightly unidirectional. Having discussed the above points, the investigation follows with
focusing on the idea of co-innovation from various theoretical papers, cases, and
empirical results in authentic business settings. Finally, this paper proposes a conceptual
framework regarding co-innovation concept from the above arguments.
Our study is structured into four specific sections. The first part presents the idea of
marketing, innovation, value, and SDL; it is primarily devoted to elucidating succinct
overview on the paradigm shift in the business landscapes that form the concept of
collaboration. The second section focuses on the idea of value innovation – a
unidirectional innovation philosophy – that seems to be the concept that precedes the
notion of co-innovation. The third section is the nucleus of this study as it addresses the
 Co-innovation: a review and conceptual framework 363

idea of co-innovation, logical constructs, and possible outputs derived from previous
researchers. Subsequently, the conceptual framework of co-innovation is developed
through the synthesis of theoretical and empirical evidence from various cases, and then
this paper concludes with limitations of the study as well as future directions.

2 Value, marketing, innovation: SDL perspective

According to Drucker (1954, pp.39–40), in order to “create a customer, the business

enterprise has two-and only two-basic functions: marketing and innovation”. Under its
philosophical notion, marketing is known as (Kotler and Armstrong, 2013):
1 the process of creation
2 the delivery of value by firms, to capture value from customers while still
maintaining a strong relationship between the two activities.
Innovation, on the other hand, is identified as value adding activities that are supported
by creativity and strengthened by technological, organisational and institutional
capabilities (Ahmed and Shepherd, 2012; Bitzer and Bijman, 2015). Both concepts of
marketing and innovation bring forth one particular outcome called value.
In the traditional economy concepts, the value had been viewed as something that was
embedded within produced goods by the manufacturers. Segregation between firms as
value creators and customers as value buyers did exist but taken for granted. The way in
which firms planned, managed and evaluated their marketing and innovation strategies
had been primarily unidirectional. This classic view about the exclusivity of value
produced merely by the company is called goods-dominant logic (GDL) (Vargo and
Lusch, 2004).
However, through the advancement of technology, this paradigm has steadily been
shifted towards an entirely new way of life as the logic that perceives value is built
reciprocally both by the firms and the customers. At this point on, the customers have
similar or even greater power compared to the firms, and the focus of the business is no
longer centralised on firms but consumer markets. This given argument is known as SDL
as stated by Vargo and Lusch (2004), a viewpoint that believes value is neither built on
the self-sufficiency of companies nor embedded solely through the manufactured outputs.
In other words, value is constituted through active participation and collaboration with
customers.
Upon realising the importance of customers’ voice in the market in regards to the
creation of value, scholars and practitioners subsequently began to focus on this notion of
collective and symbiotic actions. In fact, there have been growing various marketing
literature that streams under the concept of value co-creation (Prahalad and Ramaswamy,
2004). Their concept mainly attempts to discuss the collaborative action between firms
and customers in the market to develop and create value.
Following the emergence of marketing theory that has commenced to shift its focus
from a company-centric view towards a customer-centric attitude, we also see that
innovation studies have been mimicking the way marketing philosophy has been
transformed. As stated above, innovation incorporates value adding actions – to support
the creation, value delivery, and capture process in the marketing activities – it might
364 H.S. Saragih and J.D. Tan

seem that the classical view of innovation also need transformation. That is to say, the
idea of value innovation’s unidirectional approach has appeared to be sell-by date.

2.1 Value innovation

It is important to note that the notion of value innovation was first initiated by Kim and
Mauborgne (1997), they believe it is a new strategic logic that challenges firms to make
either exceedingly unique differentiation or extraordinarily low-price value propositions
in the market. In other words, Kim and Mauborgne (1997) inquired the firms’
conventional logic to survive in the industry’s intense competition and continual
shrinking profits with no new exceptional ideas, while at the same time challenging the
firms to think differently about the current trends, to later come up with an exceptionally
unique idea that could make the competition in the industry no longer relevant.
Through this new strategic logic, firms must then recognise customers’ true needs and
wants: What changes can be made in the service offerings? What types of activities from
the creation-services-delivery that operational cost could be reduced to enable firms to
come up with distinct and outstanding value propositions and attract a multitude of
customers in the marketplace? This might sound utopia to those who have scepticism
towards the above logic and believe firmly in the Porterian teachings of competition.
However, there are various fruitful cases of value innovation that make the above concept
comes into life. Kinepolis, Accor and CNN were the most highlighted success stories that
demonstrate the prominence of value innovation.
From the mentioned cases above, the innovative outcomes that had resulted from
value innovation were reflected on the reconfiguration or process re-engineering of value
propositions that were not solely constituted on their end products as new product or
services. Kim and Mauborgne (1997) denoted that it could be the creative processes that
were altered (e.g., Compaq and Callaway), the service processes that were re-engineered
(e.g., IKEA and Accor) or the consumption methods that were modified (e.g., CNN and
Kinepolis). According to these facts, it is evident to assert that value innovation not only
seek to result in the end product but takes into account the whole production processes as
an integrated value chains that prompt operational effectiveness and bring about
distinctive advantages in the market (Lee, 2012; Lin, 2014).
Nevertheless, having discussed the SDL philosophy in the previous paragraphs, our
study can infer that the reciprocal interactions between firms and customers in value
innovation concept had rarely been expounded. The nuance of waterfall model in creating
innovation is strongly reflected (Chesbrough, 2006, 2008; Chesbrough and Stern, 2012).
Value innovation was merely seen as an active one-way approach instigated by firms
without putting considerable attention to the customers’ capabilities to possibly join,
participate and collaborate in creating innovations (Kim and Mauborgne, 1997). Enticed
by the technological progression that diminishes boundaries between stakeholders in the
market, isolated form of innovation may not be able to sustain competitive advantage in
the industry (Lee et al., 2012).

2.2 From waterfall to reciprocal

Intrigued by this fact, it seemed that innovation must then start to shift from a
company-centred attitude into a more open and collaborative form as noted by Baldwin
and Von Hippel (2011). Their idea challenged the promulgated view of innovation held
 Co-innovation: a review and conceptual framework 365

by Schumpeter (1934), Romer (1990), Teece (1996) and Baumol (2002) that assumed
innovation must be heavily concentrated on the producers’ role to outperform
competitors in their industry. Innovation must be kept secret to ‘surprise’ the market, and
hence becoming a market leader. This philosophy, however, might no longer be relevant,
as globalisation has affected the market into information societies.
Given the above arguments, the idea of open and collaborative innovation shall then
be the cornerstone of businesses. Baldwin and Von Hippel (2011) defined open,
collaborative innovation as a shared work of generating innovative design conducted by
various actors from firms, users, and collaborating partners. Align with Beelaerts and
Santema (2006); this idea simply disassembles borders and boundaries that might have
previously inhibited firms to bring forth fresh new ideas and insights from the users’
perspectives after buying or consuming particular services or products provided by the
company in the market in their daily lives. Co-innovation, as a form of open and
collaborative innovation, is then drawing the attention of various scholars.
By far, this study noted that it is Bossink (2002), Lee et al. (2012) and Bitzer and
Bijman (2015) that have comprehended, extended and discussed exhaustively the
philosophical notion of co-innovation. Various cases of fruitful collaborative innovation
in the practical business settings do present such as the symbiotic mutualism of Nike and
Apple (Ramaswamy, 2008), Lego (Greer and Lei, 2012) and DuPont (World Economic
Forum, 2015). There are several studies, however, which have also demonstrated the
fruitfulness of co-innovation implicitly such as the cases of IBM, Mekanism, Lake Nona
(Shih et al., 2008; Edmonson et al., 2012; Teixeira and Caverly, 2012).

3 Co-innovation

Before Bossink (2002), there were in fact several scholars who had formerly apprehended
the importance of collaborative or participative innovation rather than the classical view
of one-way waterfall logic of innovation (see for examples Rothwell and Dodgson, 1991;
Gemünden et al., 1992; Tidd, 1995; Berthon et al., 1999; Doz et al., 2000). Their studies
explicated that innovation includes external participators such as universities, research
institutes, or customers. According to Baldwin and Von Hippel (2011) in their article
titled Modelling a paradigm shift: from producer innovation to user and open
collaboration innovation, the nature of innovation shall no longer rely solely on the
producer’s role but directed towards participatory forms with customers as well as other
relevant external stakeholders. Hence, co-innovation requires serious attention, and it
might become highly disadvantageous for the firm if not properly organised (Shih
et al., 2008). The idea is primarily to challenge the classic way of producer-centric views,
hence opening up new possibilities, and breaking the boundaries between firms and
external stakeholders to achieve not only profits but greater good in the society (Botha
et al., 2015).
Co-innovation is not without any sound theoretical background. As discussed in the
first section that marketing has shifted its focus from company-centric towards
customers, so thus innovation needs to mimic the way marketing philosophy is seen
(Chesbrough and Appleyard, 2007). In the digital era, customers currently have more
bargaining power compared to the historical times where people had insufficient ability
towards information gathering. Nowadays, customers’ bargaining power is high since
366 H.S. Saragih and J.D. Tan

information could easily be found on the tap of their fingers. Suppliers, on the other hand,
have slightly lesser bargaining power due to the technological advancement that can
connect their potential customers with their competitors relatively with ease. This
pinpoints some certain phenomenon such as co-creation, coproduction, or prosumer
demonstrating how the customers have significant impacts in creating values with firms.
That is to say; collaboration has become the nucleus of business activities (Caruso et al.,
2009; Rittgen, 2010; Nidumolu et al., 2014; Vercesi et al., 2014).
It is the time for reciprocal, mutual symbiotic between firms and customers in
creating value. In this sense, value is no longer built solitarily by companies (Odenthal
et al., 2004), rather it is constituted in the market (Prahalad and Ramaswamy, 2004).
Innovation, therefore, does not rely only on firms, but also accounted on customers as the
users; it does make sense that open and collaborative innovation must be taken into
consideration seriously by firms, managers and scholars to open up new horizons in the
business markets to provide exceptional services. Hence, value co-innovation in this
study is the act of collaborative actions carried out by various internal and external
stakeholders towards creating distinctive and exceptional value in the market (Lee et al.,
2012).
Implementations of co-innovation have been investigated in both product and
service-intensive industries. Bossink (2002) has provided the full list of co-innovation
interactions patterns globally which were noted by numerous scholars. It ranged from
aerospace, agriculture, automotive, chemical, consumer electronics, education,
petrochemical, and even textile found in various countries (Baba, 1989; Wissema and
Euser, 1991; Bidault et al., 1992; Tidd, 1995; Shaw, 1996; Kraatz, 1998). In the more
recent times, the cases of Nike and Apple have been one of the most popular examples
regarding collaborative innovation (Ramaswamy, 2008). Maniak and Midler (2008) have
attempted to investigate the notion of co-innovation in car manufacturing industry
empirically. It is also found that Van Blokland et al. (2008) has uniquely contributed in
the streams of co-innovation through their confirmatory study in the airline industry
about market share and time to market seen through the time-value curve. Through his
study, it is discovered that collaborative innovation resulted in higher market shares and
shorter time to market, which signifies desirable result throughout this collaborative
actions.
In the service-intensive industries, there are also several scholars who had
investigated the concept of co-innovation. Parmentier and Mangematin (2011) examined
how co-innovation be applied in creative industries. Their study eventually shed some
light regarding the collaborative activities in four firms: Trackmania, Freebox,
Propellerhead, and MySQL. It was discovered that the locus of innovation is found in the
user communities, which must be fully acknowledged by firms in these industries. Not
only coordination between the two actors on the innovation locus, but synergistic
orchestration throughout the innovation processes that are crucially demanded. Sørensen
and Mattsson (2008) studied co-innovation and its relevance in the collaborative
public-private city innovation.

4 Review method

Various databases of scholarly literature were selected as the primary sources of this
study, which are Science Direct, JSTOR, EBSCO, and ProQuest. Several keywords are
 Co-innovation: a review and conceptual framework 367

used to obtain relevant studies regarding co-innovation such as ‘collaborative

innovation’, ‘co-innovation’, and ‘open innovation’. Only articles that are presented in
English that are examined. In addition, various cases from Harvard Business Publishing
are also searched.
Based on this method, the next sections attempt to interpret the pillars or logical
constructs of co-innovation. It is found that co-innovation is built upon five analytical
pillars: collaboration, co-creation, complementarity, coordination, and convergence
(Bossink, 2002; Chesbrough, 2006; Ketchen et al., 2007; Baldwin and Von Hippel, 2011;
Romero and Molina, 2011; Greer and Lei, 2012; Lee et al., 2012; Bitzer and Bijman,
2015; Bugshan, 2015; World Economic Forum, 2015). This paper will elucidate each
pillar in the next paragraphs. Then, it will be continued with the proposed conceptual
framework of the five co-s of co-innovation.

5 Five co's of co-innovation

5.1 Collaboration
Having frequently been mentioned in the previous paragraphs, collaboration is nowadays
imperative for firms to survive in the market. Studies regarding cooperation between
companies and external actors have been proliferating in the past years (Wang and
Archer, 2004; Singh and Mitchell, 2005; Rittgen, 2010; Evans et al., 2011; Vercesi et al.,
2014). This might be caused by the paradigm shift of marketing scholars that have
deconstructed the company-centredness view of achieving sustainable competitive
advantage solitarily. Collaboration in this study refers to the multi-actors active
participatory actions with each distinct characteristics and resources (Bitzer and Bijman,
2015). That is to say, firms are not only responsible for orchestrating innovative ideas
autonomously, but they must also acknowledge the roles of external stakeholders such as
customers, suppliers, partner organisations, governments, universities, even competitors
and alike to open up new possibilities, insights and ideas throughout the innovation
processes (Lee et al., 2012; Vesterberg, 2014). The impressive case of IBM in
collaborating with its competitors in developing semiconductors such as chartered
semiconductor, Infineon, and advanced micro devices has been one breakthrough
example of collaborative value innovation amongst firm and its competitors (Shih et al.,
2008).

5.2 Coordination
Considering the main difference between coordination and collaboration is important. In
this paper, the context of cooperation is meant to diminish boundaries between firms and
the outsiders, making the innovation open by involving not only internal but also external
sources (Chesbrough, 2006). In this respect, the idea of coordination is to ensure
harmonious orchestration of various contributing actors with their unique resources
towards synergistic goals desired by the company. Obviously, the coordinating
actor – the main firm – must ensure that every contributing stakeholder that is fully
assigned and utilised parades concurrently towards a specific direction.
It is evident from the case of Lake Nona Medical City that to achieve the four pillars
of innovation, they intensely coordinated with several stakeholders such as general
368 H.S. Saragih and J.D. Tan

electric and Promethean (Edmonson et al., 2012). It was not merely ‘outsourcing’ the
innovative ideas towards its partners, but actively involved in the operational processes.
In the case of IBM, the coordination aspect is apparent to avoid misuse of the
collaborated projects that are filled with various actors and competitors (Shih et al.,
2008). As stated by Caruso et al. (2009) organisation must find the effective ways to
coordinate spontaneously and responsively across its units.

5.3 Convergence
Given the above arguments, the notion of convergence by Lee et al. (2012) is therefore
indispensable. They noted that value-focused innovations demand convergent thinking.
Vesterberg (2014) demonstrated that the idea of open innovation must be directed
towards a specific purpose, as evidenced by Herzog (2011) in Figure 1. By that, it is
plausible to state that every resources and capabilities possessed by various actors in the
innovation process – technological, organisational, and institutional – must be arranged
complementarily towards the desired objectives. Following the digital trends in the
present era, firms must ensure that their innovative ideas are effectively commercialised
in the market whether their services are distributed from owned, paid, or earned media
(Strauss, 2016). Everything must be directed towards a specific direction.

Figure 1 The open innovation model

Source: Herzog (2011)

 Co-innovation: a review and conceptual framework 369

Convergence entices various contributing actors to act towards a shared and focused
purpose. The case of Mekanism as one of the leader in viral marketing in its era around
2007 to 2011 provides clear understanding regarding the way in which it collaborated
with its customers in creating e-WOM with bloggers, ‘vloggers’, artists and sport stars
(Teixeira and Caverly, 2012) through the power of technological and organisational
capabilities. Mekanism collaborate with the above, various actors towards owned, earned,
and paid media (Strauss, 2016) to make their contents viral on the internet, combined
with the new concept of storytelling, making them exceptionally different with their
competitors.

5.4 Complementarity
For the above reasons, complementarity between technological, institutional,
organisational (Bitzer and Bijman, 2015) resources and capabilities shall be incorporated
properly. Technological capability refers to the organisations’ ability in managing
existing and potential technology; institutional capabilities relates to the formal
governance and norms applied and constituted by the firm as well as its external
stakeholder; lastly, organisational capability refers to the firms’ ability in managing the
firms’ organisational culture and behaviour.
The combinations of the above aspects, if exploited properly, can result in unique
value proposition in the market. It may not always be rooted on technological resources
and capabilities; rather it is established due to the organisational and institutional
capabilities. The cases of Kinepolis and Accor, for instance, did not rely mainly on
technological advancement. In fact, they only exploit their institutional capabilities to re-
engineer the business model with the exceptionally different value proposition in the
market. This argument is in line with Adler et al. (2011) who contended that
organisations need to develop ‘new organisational capabilities, and the coordinating
mechanisms to make it scalable’. In this sense, it is plausible to say that the stated
mechanism might be built based on the technological or institutional capabilities, which
complement one another towards organisational capacities.

5.5 Co-creation
The last aspect but unquestionably possesses a similar level of importance amongst the
other constructs is co-creation. This aspect plays a crucial role in the collaborative
innovation process as illustrated by Romero and Molina (2011). They stated that firms’
abilities to manage costs, quality, and response time to gain and sustain competitive
advantage would still be needed. However, in the current era, it is much more important
for firms to learn new capabilities to co-create value with the customer; thus firms must
be able to create enticing experiences with consumers through collaboration, which is
later expected to produce highly relevant innovative ideas. Again, since the focus of
marketing has moved towards customers (Vargo and Lusch, 2004), it is arguably
reasonable to also collaborate with them as potential innovating partners. Co-creation
does involve not only customers, but also other firms’ external stakeholders such as
universities, research institutes, communities, and alike.
370 H.S. Saragih and J.D. Tan

5.6 Possible co-innovation outputs

Finally, innovative outputs are the main intentions of value co-innovation. This study
simply adapts the idea from Lee et al. (2012) regarding the five possible outcomes of
co-innovation: new products or services (Shih et al., 2008; Teixeira and Caverly, 2012;
Greer and Lei, 2012), new business model (Chesbrough and Appleyard, 2007;
Chesbrough and Stern, 2012; Greer and Lei, 2012; Nidumolu et al., 2014; Bitzer and
Bijman, 2015), new customer base (Ramaswamy, 2008; Greer and Lei, 2012; Teixeira
and Caverly, 2012), new customer value (Ramaswamy, 2008; Parmentier and
Mangematin, 2011; Greer and Lei, 2012), or new effective value chain (Greer and Lei,
2012; Teixeira and Caverly, 2012; Nidumolu et al., 2014; Bitzer and Bijman, 2015).

6 Proposed conceptual framework of co-innovation

Having discussed the five pillars of co-innovation in the previous section, this paper
attempts to propose a conceptual framework of co-innovation with the pillars mentioned
above. The proposed theoretical framework is illustrated in Figure 2.

Figure 2 Proposed co-innovation conceptual framework

6.1 Collaboration and co-creation

The first building block exemplifies the collaborating actors that are no longer segregated
but incorporated as a collective set of players to co-create innovative value. The actors
may consist of the firm, competitors, partner organisations, outsiders, or customers.
Given these contributors with diverse needs, opinions and motivations, coordination
mechanisms and convergent goals must be stated and discussed collectively. Thereby, the
contributing actors can come up with necessary agreements and policies that might need
to be justified along the collaboration processes.
 Table 1
Collaboration Coordination and Complementary
Case Authors, Year Outcomes
and co-creation convergence Technological Institutional – PP rules Organisational - modality
IBM Shih et al. IBM collaborates Various mechanisms Technological The ability to accept The abilities of each New products: 45-nm
(2008) with its of coordination are resources and the risk of radical institution to collaborate chips, SOI, silicon
competitors made to ensure no capabilities were collaboration together germanium tech, etc.
(Chartered forms of misconduct combined
Semiconductor, on the collaborative towards the
Infineon, and actions, and also to development of
Advanced Micro split responsibilities 90-nm node for
Devices) between each sub- Bulk CMOS
groups of innovation
Lake Nona Edmonson Lake Nona Strategic alliance Technological Conducting regular Lake Nona and its strategic New services and
et al. (2012) collaborated with matrix is developed capabilities meetings with partners partner firms have customer value
several firms to ensure the task is possessed by GE to foster better successfully practiced
such as GE and well organised is aligned with relationships in the synergistic coordination in
Promethean the sustainability collaboration processes conducting the co-innovation
towards goal of Lake processes
Some empirical cases of co-innovation

achieving the City

desired goals
Mekanism Teixeira and Mekanism with Mekanism created a Combination of Mutual relations and Mekanism was able to break More effective value
Caverly its influencers certain network of earned, paid, and mechanisms between the industry’s monotone chains in advertising
(2012) (Bloggers, online influencers to ensure owned media to Mekanism and its nuance with more interactive towards clients’
citizens with high mutual symbiotic communicate the influencers is two ways interactive of customers in the
Co-innovation: a review and conceptual framework

followers, artists) amongst the brands developed advertising by collaboration digital era
The comments contracting parties
given by the
audiences in the
social media can
give unique
insights towards
Mekanism or its
clients for future
offerings
371
 372

Table 1

Collaboration Coordination and Complementary

Case Authors, Year Outcomes
and co-creation convergence Technological Institutional – PP rules Organisational - modality
Propellerhead Parmentier Creation of new Integration of user’s Propellerhead Propellerhead does not Ability to collaborate New customer base:
and potential ideas through a partly hosted the formally justify sets of through many lead users Platform of users
Mangematin functions of the particular form of communities rules but it tends to be towards contributing
(2011) software by the communication that leads to the more flexible in the innovative ideas
users and also reciprocal implementation
test with the communications processes of
users of software within the communicating
development community innovative ideas from
project the communities
H.S. Saragih and J.D. Tan

Webasto Chesbrough Webasto and its The workshop Technological Webasto has Webasto collaborated both New product:
and Stern users in involves lead users, capabilities and challenged the way with internal professionals Multipurpose tailgate
(2012) developing new Webasto’s designers, resources are innovation done in its and its external stakeholders,
ideas and experts which directed toward nature the lead users
focuses large feasible ideas
amounts of ideas into generated from
few most feasible the workshop
proposals
Nike and Ramaswamy Nike and its Nike attempts to Nike has the N/A In this case, Nike and Apple New customer base:
Apple (2008) customers in orchestrate the capability in both has successfully Joga.com, online
Some empirical cases of co-innovation (continued)

designing innovative ideas and sports reconfigure the ways in communities

sneakers inputs from their technology, and which flow of information New product:
customers. The combined with distributed amongst Nike Sneakers
combination between Apple’s customers through digital
Nike and Apple capabilities in channels. New services: Nike+
converged toward crafting and iTunes
digital sports technological synchronisation
innovation innovations New value chain:
Reduced costs of
marketing towards
WOM
 Co-innovation: a review and conceptual framework 373

IBM is one of the examples that has demonstrated successfully the coordinated
collaboration towards creating innovation with its competitors (Shih et al., 2008),
breaking the boundaries of longstanding view of the isolated form of innovation (Lee
et al., 2012). Nike and Apple strengthen this view that to produce distinctive value
proposition in the market, collaboration is one key to achieve such objective
(Ramaswamy, 2008). Nike’s efforts to also co-create innovation in their sneakers
products with its customers has successfully demonstrated the way in which collaboration
opens up new horizons in making innovation ideas.

6.2 Coordination and convergence

It is then continued on the second layer in the middle box. It emphasises that the
collaborating actors shall be able to direct their complementing resources and
capabilities – regarding technological, institutional and organisational – in a coordinated
and converging manner. In other words, every contributing actor must be able to share
their complementary resources collectively and practice synergistic moves along the
innovation processes. This is shown by the converging arrow shapes directing from the
left towards the middle block in the centre.
The case of Mekanism in collaborating with its influencers demonstrated certain
mechanisms in creating ‘influencers network’ to coordinate the mutual commitments for
the two parties (Teixeira and Caverly, 2012). Webasto’s case, in particular, has also
justified the importance of coordination – implied explicitly from the way they conducted
the workshop with lead users – and also convergence in producing value-focused
innovations, as can be inferred from their illustration of selecting hundreds of ideas
towards only three proposals.

6.3 Potential outcomes of co-innovation

In the end, the goals of the co-innovation processes shall be targeted towards any of these
desired outputs: either the development of new business models, new customer value,
new customer base, new effective value chain or new products and services, as stated in
the previous section. It can be observed from Table 1 that co-innovative companies have
efficaciously come up with various innovative designs and ideas in the market.
Co-innovation can result in all of the five aspects if not one or two: Business model,
customer base, customer value, value chain, and products/services (Figure 2). This is
because the external and internal factors of the firms and collaborating actors do have
some limitations in the market. Therefore, the value-focused proposition is vital in the
collaboration processes.

7 Concluding remarks

Although the review has reached its aims, this study is not without any limitations. In this
exploratory paper, we only provide several cases from secondary sources to constitute the
proposed conceptual framework, and the mentioned cases are expected to give clear
understandings regarding the way in which co-innovation takes place in firms. Hence,
further investigation can provide new and novel insights that might be missed on this
374 H.S. Saragih and J.D. Tan

proposed conceptual framework. Second, this study has gathered and referred literature
from very limited scholarly databases as have been mentioned in the preceding section.
This is mainly due to the authors’ limited access towards other scholarly databases. This
study has not yet discussed ‘free innovation’ (Hippel, 2017) and how it might differ with
the four types of innovation presented earlier in this study. Future research must highlight
this issue and shed some light in this particular topic.
The implications in this study, practically, are that industry player can begin to
ponder in technical manners that there are principally five elements of conducting
co-innovation process. Managers can begin to initiate the discussions ways in which
co-innovation process must be built. Theoretically, this study has initiated the discussions
how co-innovation can be implemented in various organisational settings. Future research
must be directed towards a detailed understanding regarding how each of this element
can be practised in different organisational settings and industries. Also, future scholars
and practitioners would be greatly benefited by sound statistical evidence as to why these
five elements are essential as the foundation of co-innovation processes.
This research has highlighted the concept of co-innovation that begins by first
explaining the SDL perspective, the notion of value innovation, continued with the five
constructs of co-innovation along with its possible outcomes and finally proposes a
conceptual framework of co-innovation. Through this paper, scholars as well as
managers, are expected to realise that solitary and isolated practices of value creation and
innovation might gradually be shifting towards more open and collaborative forms.

Acknowledgements

The authors would like to extend their appreciation to Professor Angappa Gunasekaran,
PhD and the two anonymous peer-reviewers for the invaluable suggestions in improving
the quality of the paper.

References
Adler, P., Hecksher, C. and Prusak, L. (2011) ‘Building a collaborative enterprise’, Harvard
Business Review, Vol. 89, No. 7/8, pp.94–101.
Ahmed, P. and Shepherd, C. (2012) Innovation Management: Context, Strategies, Systems, and
Processes, Pearson Prentice Hall, New York, NY.
Baba, Y. (1989) ‘The dynamics of continuous innovation in scale-intensive industries’, Strategic
Management Journal, Vol. 10, No. 1, pp.89–100.
Baldwin, C. and Von Hippel, E. (2011) ‘Modeling a paradigm shift: from producer innovation to
user and open collaborative innovation’, Organization Science, Vol. 22, No. 6, pp.1399–1417
[online] https://doi.org/10.1287/orsc.1100.0618.
Baumol, W.J. (2002) The Free-Market Innovation Machine: Analyzing The Growth Miracle of
Capitalism, Princeton University Press, New Jersey.
Beelaerts, W. and Santema, S. (2006) ‘Value chain innovation processes and the influence of
co-innovation’, Proceedings of the 22nd IMP Conference, IMP.
Berthon, P., Hulbert, J.M. and Pitt, L.F. (1999) ‘To serve or create? Strategic orientations toward
customers and innovation’, California Management Review, Vol. 42, No. 1, pp.37–58 [online]
https://doi.org/10.2307/41166018.
 Co-innovation: a review and conceptual framework 375

Bidault, F., Laurent, P. and Segla, C. (1992) ‘Competitive and cooperative strategies in engineering
services’, Long Range Planning, Vol. 25, No. 3, pp.43–49.
Bitzer, V. and Bijman, J. (2015) ‘From innovation to co-innovation? An exploration of African
agrifood chains’, British Food Journal, Vol. 117, No. 8, pp.2182–2199 [online]
https://doi.org/10.1108/BFJ-12-2014-0403.
Bossink, B.A. (2002) ‘The development of co–innovation strategies: stages and interaction patterns
in interfirm innovation’, R&D Management, Vol. 32, No. 4, pp.311–320 [online]
https://doi.org/10.1111/1467-9310.00263.
Botha, N., Blackett, P., Beechener, S., Gray, D., Reid, J., Park, N. and Dunningham, A. (2015)
‘Lessons from three co-innovation case studies in New Zealand’, Conference: Managing
Change, Innovation and Action in an Ever Shrinking World, Adelaide, South Australia.
Bugshan, H. (2015) ‘Co-innovation: the role of online communities’, Journal of
Strategic Marketing, Vol. 23, No. 2, pp.175–186 [online] https://doi.org/10.1080/
0965254X.2014.920905.
Caruso, H.M., Rogers, T. and Bazerman, M.H. (2009) ‘Boundaries need not be barriers: leading
collaboration among groups in decentralized organizations’, Crossing The Divide: Intergroup
Leadership in a World of Difference, pp.113–25.
Chesbrough, H.W. (2006) Open Innovation: The New Imperative For Creating and Profiting From
Technology, Harvard Business Press, Boston, MA.
Chesbrough, H. (2008) Open Innovation and Open Business Models [online]
http://cmapspublic2.ihmc.us/rid=1219195361890_2030273000_8080/open-innovation-
seminarhenrychesbrough.pdf.
Chesbrough, H. and Stern, A. (2012) Webasto: Co Creating Innovation with Lead Users,
Berkeley-Haas Case Series, University of California, Berkeley, Haas School of Business,
Berkeley, CA.
Chesbrough, H.W. and Appleyard, M.M. (2007) ‘Open innovation and strategy’, California
Management Review, Vol. 50, No. 1, pp.57–76 [online] https://doi.org/10.1016/
j.jbiosc.2010.11.012.
Doz, Y.L., Olk, P.M. and Ring, P.S. (2000) ‘Formation processes of R&D consortia: which path to
take? Where does it lead?’, Strategic Management Journal, Vol. 1, No. 3, p.239 [online]
https://doi.org/10.1002/(SICI)1097-0266(200003)21:3<239::AID-SMJ97>3.0.CO;2-K
Drucker, P.F. (1954) The Practice of Management, Harper & Row, New York.
Edmonson, A.C., Ribot, S. and Zuzul, T. (2012) ‘Designing a culture of collaboration at Lake Nona
Medical City’, Harvard Business School Case Collection, October, No. 613-022.
Evans, T., Lambiotte, R. and Panzarasa, P. (2011) ‘Community structure and patterns of scientific
collaboration in business and management’, Scientometrics, Vol. 89, No. 1, pp.381–396.
Gemünden, H.G., Heydebreck, P. and Herden, R. (1992) ‘Technological interweavement: a means
of achieving innovation success’, R&D Management, Vol. 22, No. 4, pp.359–376.
Greer, C.R. and Lei, D. (2012) ‘Collaborative innovation with customers: a review of the literature
and suggestions for future research’, International Journal of Management Reviews, March,
Vol. 14, pp.63–84 [online] https://doi.org/10.1111/j.1468-2370.2011.00310.x.
Herzog, P. (2011) ‘Innovation culture’, Open and Closed Innovation, pp.9–57, Gabler [online]
https://doi.org/10.1007/978-3-8349-6165-5_2.
Hippel, E.V. (2017) Free Innovation, MIT Press, Cambridge Massachusetts.
Ketchen, D.J., Ireland, R.D. and Snow, C.C. (2007) ‘Strategic entrepreneurship, collaborative
innovation, and wealth creation’, Strategic Entrepreneurship Journal, Vol. 1, Nos. 3/4,
pp.371–385 [online] https://doi.org/10.1002/sej.20.
Kim, W.C. and Mauborgne, R. (1997) ‘Value innovation: the strategic logic of high growth’,
Harvard Business Review, Vol. Rev. 75, Harvard Business School Publishing, Boston, MA.
Kotler, P. and Armstrong, G. (2013) Principles of Marketing (15th Global Edition), Pearson
Education Limited, Harlow, UK.
376 H.S. Saragih and J.D. Tan

Kraatz, M.S. (1998) ‘Learning by association? Interorganizational networks and adaptation to

environmental change’, Academy of Management Journal, Vol. 41, No. 6, pp.621–643
[online] https://doi.org/10.2307/256961.
Lee, K-J. (2012) ‘The coevolution of IT innovation and copyright institutions: the development of
the mobile music business in Japan and Korea’, The Journal of Strategic Information Systems,
Vol. 21, No. 3, pp.245–255 [online] https://doi.org/10.1016/j.jsis.2012.04.001.
Lee, S.M., Olson, D.L. and Trimi, S. (2012) ‘Co-innovation: convergenomics, collaboration, and
co-creation for organizational values’, Management Decision, Vol. 50, No. 5, pp.817–831.
Lin, C.Y. (2014) ‘The evolution of Taipei’s music industry: cluster and network dynamics in the
innovation practices of the music industry’, Urban Studies, Vol. 51, No. 2, pp.335–354
[online] https://doi.org/10.1177/0042098013489745.
Maniak, R. and Midler, C. (2008) ‘Shifting from co-development to co-innovation’, International
Journal of Automotive Technology and Management, Vol. 8, No. 4, pp.449–468 [online]
https://doi.org/10.1504/IJATM.2008.020313.
Nidumolu, R., Ellison, J., Whalen, J. and Billman, E. (2014) ‘The collaboration imperative’,
Harvard Business Review, Vol. 92, No. 4, pp.76–84.
Odenthal, S., Tovstiga, G., Tambe, H. and Van Oene, F. (2004) ‘Co-innovation: capturing the
innovation premium for growth’, Prism, Vol. 1, pp.41–55 [online] http://www.adlittle.se/
uploads/tx_extprism/prism_1_2004_co_innovation.pdf.
Parmentier, G. and Mangematin, V. (2011) ‘Community as a Locus of Innovation: Co-Innovation
with Users in the Creative Industries [online] http://hal.univ-savoie.fr/hal-00658535/.
Prahalad, C.K. and Ramaswamy, V. (2004) ‘Co-creation experiences: the next practice in value
creation’, Journal of Interactive Marketing, Vol. 18, No. 3, pp.5–14, Direct Marketing
Educational Foundation, Inc. [online] https://doi.org/Wiley Periodicals, Inc.
Ramaswamy, V. (2008) ‘Co-creating value through customers’ experiences: the Nike case’,
Strategy & Leadership, Vol. 36, No. 5, pp.9–14 [online] https://doi.org/10.1108/
10878570810902068.
Rittgen, P. (2010) ‘Success factors of e-collaboration in business process modeling’, International
Conference on Advanced Information Systems Engineering, Springer, pp.24–37.
Romer, P.M. (1990) ‘Endogenous technological change’, Journal of Political Economy, Vol. 98,
No. 5, Part 2, pp.S71–S102 [online] https://doi.org/10.1086/261725.
Romero, D. and Molina, A. (2011) ‘Collaborative networked organisations and customer
communities: value co-creation and co-innovation in the networking era’, Production
Planning & Control, Vol. 22, Nos. 5/6, pp.447–472 [online] https://doi.org/10.1080/
09537287.2010.536619.
Rothwell, R. and Dodgson, M. (1991) ‘External linkages and innovation in small and
medium-sized enterprises’, R&D Management, Vol. 21, No. 2, pp.125–138 [online]
https://doi.org/10.1111/j.1467-9310.1991.tb00742.x.
Schumpeter, J.A. (1934) The Theory of Economic Development: An Inquiry into Profits, Capital,
Credit, Interest, and the Business Cycle, Transaction Publishers, Harvard University Press,
Redvers Opie, Cambridge MA.
Shaw, B. (1996) ‘Networking in the Russian aerospace industry’, R&D Management, Vol. 26,
No. 3, pp.255–265 [online] https://doi.org/10.1111/j.1467-9310.1996.tb00960.x.
Shih, W., Pisano, G. and King, A. (2008) ‘Radical collaboration: IBM microelectronics joint
development alliances’, HBS Case Collection, pp.1–21.
Singh, K. and Mitchell, W. (2005) ‘Growth dynamics: the bidirectional relationship between
interfirm collaboration and business sales in entrant and incumbent alliances’, Strategic
Management Journal, Vol. 26, No. 6, pp.497–521 [online] https://pdfs.semanticscholar.org/
ad52/58c65569b05cdd59bc142aa137fa68a9b5b8.pdf.
Sørensen, F. and Mattsson, J. (2008) Public-Private Co-Innovation. A Natural Experiment of Open
and User Driven City-Innovation, Vol. 1, ICE-Project Working Paper.
Strauss, J. (2016) E-marketing, Routledge, London, UK.
 Co-innovation: a review and conceptual framework 377

Teece, D.J. (1996) ‘Firm organization, industrial structure, and technological innovation’,
Journal of Economic Behavior & Organization, Vol. 31, No. 2, pp.193–224 [online]
https://doi.org/10.1016/S0167-2681(96)00895-5.
Teixeira, T.S. and Caverly, A. (2012) ‘Mekanism: engineering viral marketing’, Harvard Business
School, January, pp.1–16, Harvard Business School Publishing, Boston, MA.
Tidd, J. (1995) ‘Development of novel products through intraorganizational and interorganizational
networks the case of home automation’, Journal of Product Innovation Management, Vol. 12,
No. 4, pp.307–322 [online] https://doi.org/10.1111/1540-5885.1240307.
Van Blokland, W.B., Verhagen, W.J. and Santema, S.C. (2008) ‘The effects of co-innovation on
the value-time curve: quantitative study on product level’, Journal of Business Market
Management, Vol. 2, No. 1, pp.5–24 [online] https://doi.org/doi: 10.1007/s12087-007-0020-7.
Vargo, S.L. and Lusch, R.F. (2004) ‘Evolving to a new dominant logic for marketing’, Journal of
Marketing, Vol. 68, No. 1, pp.1–17 [online] https://doi.org/10.1509/jmkg.68.1.1.24036.
Vercesi, P., Kanpandegi, I.X.M., Vecchiato, R. and Pugno, R. (2014) ‘Entrepreneurship
collaboration, new business models and firm creation: enhancing local economical network’,
in Sustainable Social, Economic and Environmental Revitalization in Multan City, pp.87–99,
Springer, Cham [online] https://doi.org/10.1007/978-3-319-02117-1_7.
Vesterberg, A. (2014) Creating New Customer Value Using a Co-innovation Perspective. A Case
Study of ABB, Masters Theses, University of Gothenburg, Gothenburg, Sweden.
Wang, S. and Archer, N. (2004) ‘Supporting collaboration in business-to-business
electronic marketplaces’, Information Systems and e-Business Management, Vol. 2, Nos. 2–3,
pp.269–286 [online] https://doi.org/10.1007/s10257-004-0034-6.
Wissema, J. and Euser, L. (1991) ‘Successful innovation through inter-company networks’, Long
Range Planning, Vol. 24, No. 6, pp.33–39.
World Economic Forum (2015) Collaborative Innovation Transforming Business, Driving
Growth, Geneva [online] http://www3.weforum.org/docs/WEF_Collaborative_Innovation_
report_2015.pdf.

View publication stats