Open Innovation in R&D: Co-Patenting With Breakthrough Innovations in Pharma

Introduction

The fundamental change of today’s globalized business context, where radical innovations are key drivers of economic progress (Sorescu et al., 2003), is compelling organizations to raise their innovation performance and production frontiers (Rothaermel, 2017; Kovacs, Marullo, Verhoeven, and Van Looy, 2019) towards the implementation of open innovation (OI) within research and development (Inauen and Schenker-Wicki, 2012). In fact, firms with the most novel innovations, including breakthrough innovations, have to simultaneously develop external (Yan, Dong, and Faems, 2020) and internal systems to disseminate diverse knowledge in order to enhance their requisite technological and marketplace competences (Agostini et al., 2016; Matskulyak, Sapozhnikova, and Kharchilava, 2019). More specifically, the pharmaceutical research centres are in dire competition to innovate in treatments (Videira et al., 2020).

The extant literature on OI stresses on the combination of: (1) the inbound process (in-house exploitation of the outside knowledge), (2) the outbound process (external exploitation of the unused internal knowledge) (Huizingh, 2011), and (3) the coupled processes (combination of inbound and outbound) (Chesbrough and Bogers, 2014). However, the outbound and the coupled processes have not been analyzed in depth. In addition, the literature has acknowledged the positive relationship between OI and radical (or breakthrough) innovation (Inauen et al., 2012), but only few recent studies have contributed to our understanding of the effects of OI on breakthrough innovations (West et al., 2014; Kovacs et al., 2019).

Furthermore, today’s health care technological innovation is focusing on efficient and effective ways to conduct rigorous clinical trials (Narayanasetty and Ravindra, 2021), while another swarm of scientists and researchers are focusing their efforts today on the role of information technology and its role in innovation (Stiller, van Witteloostuijn, and Cambre, 2021), leaving limited efforts to investigate the direct impact of co-patenting, on radical or breakthrough innovations as managerial initiatives. For this reason, the purpose of our study is to fill this persisting gap, by investigating the impact of co-patenting on breakthrough innovations in the pharmaceutical industry which could be vital to research and development managers.