Open and Closed R&D Processes: Internal Versus External Knowledge

In an attempt to help keep up with the ever changing business environments, firms are continuously attempting to find ways to open up their organizations boundaries, enabling external sources to be used. Through a means of restructuring their R&D systems, firms will face challenges when it comes to balancing their external and internal R&D activities, allowing them to profit from the amount of external knowledge that they retrieve. Throughout this paper, discussions on the influences that R&D configuration has on the performance of firms and moderating R&D capacity will be discussed further. According to researched findings, firms that continue to rely on external R&D actions experience an increase in innovative performance, up to a certain point. Larger shares of external R&D services will reduce a firm's performance. Finding the perfect medium ground is something that all chemical engineering firms will need to work on, in order to increase innovative performance, but not ruin their performance in the same respects. This paper will provide an increased amount of understanding in regards to the open innovation paradigm, which suggests that opportunity costs open for R&D borders is a lot higher for firms that possess high quality technologically based knowledge stock.