The Impact of Open Innovation Practices on Innovation Performance of the Listed Companies in Sri Lanka

Abstract

Innovation plays a prominent role in the contemporary world. It brings novel products and services to the market while exploring new ways of production, distribution, marketing, and managing all other aspects of organisations including human behaviours. Open innovation has been introduced as a new paradigm in innovation management. It has attracted wide academic attention while open innovation is providing multiple benefits to business organisations. Open innovation significantly affects industrial practices in developed countries. As an emerging and modern innovation model, open innovation in developing countries has been recognised further to be explored. Hence, this study examines the impact of open innovation practices on the innovation performance of the listed companies in Sri Lanka. Open innovation practices have been recognised in two folds in this study, as outside-in open innovation and inside-out open innovation. Hence, this study aims at two objectives- 1) to examine the impact of outside-in open innovation on the innovation performance and 2) to analyse the impact of inside-out open innovation on the innovation performance of the large firms in Sri Lanka. The cross-sectional data were collected using the survey method from 165 top-level managers of listed companies in Sri Lanka. The sample was selected by using purposive and snowballing sampling methods. The data were analysed using the Statistical Package for Social Sciences version 25 (SPSS 25). After testing the validity and the reliability of the instrument and collected data, a simple regression analysis was conducted to test the hypothesis. The study's findings are illustrated as both outside-in open innovation and inside-out open innovation positively and significantly impacting on the innovation performance. The study will deliver an enduring contribution to advancing knowledge of open innovation and its real-world practices.

Keywords: Open Innovation, Innovation Performance, Inside-Out Open Innovation, Outside-In Open Innovation