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Understanding the Advantages of Open Innovation Practices in Corporate Venturing in Terms of Real Options

  1. Wim Vanhaverbeke1,
  2. Vareska Van de Vrande2,
  3. Henry Chesbrough3

Article first published online: 19 NOV 2008

DOI: 10.1111/j.1467-8691.2008.00499.x

Issue

Creativity and Innovation Management

Creativity and Innovation Management

Volume 17, Issue 4, pages 251–258, December 2008

Additional Information

How to Cite

Vanhaverbeke, W., Van de Vrande, V. and Chesbrough, H. (2008), Understanding the Advantages of Open Innovation Practices in Corporate Venturing in Terms of Real Options. Creativity and Innovation Management, 17: 251–258. doi: 10.1111/j.1467-8691.2008.00499.x

Author Information

  1. 1

    Department of Business Studies at Hasselt University

  2. 2

    Ecole Polytechnique Fédérale de Lausanne (EPFL)

  3. 3

    Haas School of Business at University of Calofornia at Berkeley

Publication History

  1. Issue published online: 19 NOV 2008
  2. Article first published online: 19 NOV 2008

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Part of the advantages of using open innovation (compared to closed innovation) in corporate venturing can be explained by applying the real options approach. Open innovation in risk-laden activities such as corporate venturing has the following advantages: (i) benefits from early involvement in new technologies or business opportunities; (ii) delayed financial commitment; (iii) early exits reducing the downward losses; and (iv) delayed exit in case it spins off a venture. We furthermore argue that these benefits do not automatically materialize. Innovative firms have to learn new skills and routines to develop the full ‘real option’ potential of open innovation practices.

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