Idea Competitions under scrutiny

Idea Competitions under scrutiny: Acquisition, intelligence or public

relations mechanism?

Letizia Mortara ⁎, Simon J. Ford, Manuel Jaeger

Centre for Technology Management, Institute for Manufacturing, University of Cambridge, 17 Charles Babbage Road, Cambridge, CB3 0FS, UK

article info abstract

Article history:

Received 3 November 2011

Received in revised form 7 January 2013

Accepted 13 January 2013

Available online 26 February 2013

Idea Competitions (ICs) are becoming a popular mechanism chosen by firms to perform Open

Innovation. They are a way to engage with external sources of knowledge such as individual

entrepreneurs and small firms who are asked to submit ideas and compete for a prize. However,

little is known about the success of ICs as acquisition mechanisms. The researchers conducted

interviews in five multinational companies to evaluate the effects of using ICs as an acquisition

mechanism. Although still preliminary, the results of this study show that the success of ICs as

an acquisition mechanism remains uncertain because their output (i.e. the number of ideas

acquired) is often low compared to the input (i.e. the number of ideas submitted) and effort

required to run them (e.g. to vet ideas). Across the cases observed, ICs appear to be more

successful at identifying and acquiring early-stage ideas, particularly those outside the

current business focus. The study shows that ICs deliver other functional benefits such as

improved intelligence and public relations and that these need to be considered as part of the

evaluation of the IC's success. The paper concludes by discussing the conditions in which ICs

are implemented and the implications for Open Innovation theory.

© 2013 Elsevier Inc. All rights reserved.

Keywords:

Idea Competitions

Innovation tournaments

Innovation contests

Crowdsourcing

Open innovation

Acquisition mechanism

Intelligence

User innovation

Public relations

1. Introduction

The strategic importance of Open Innovation (OI) is being

increasingly recognized by firms, with the role of external

innovation sources such as start-ups, small firms, customers

and individual inventors becoming more significant [1]. For

many companies the inbound OI process is the attractive

element of OI on which emphasis is placed [2]. In the search

for knowledge that can deliver innovative products and services,

existing methods for the acquisition of ideas and technology are

being utilized in novel ways. Ideas competitions (ICs) are one

such method. While they have a considerable history of practice

[3], their usage by firms has significantly increased following

the wider adoption of OI and the improved ability to access to

knowledge sources globally through the internet.

At the same time, ICs are receiving an increased amount of

attention within industry and academia, with a number of ICs

run by multinational firms recently documented in the academic

and popular press. The I-Prize by Cisco Systems, for example,

made it into the pages of important business magazines

[4,5]. With the aim of identifying the next future billion

dollar business, Cisco invited external innovators to partic￾ipate in their I-Prize challenge with the opportunity to

win $250,000. The competition stimulated significant interest,

receiving thousands of ideas during the two rounds [4]. Other

high profile competitions have been run by IBM [6,7] and GE

[8], and the list of firms experimenting with ICs continues to

increase.

Although ICs have been used since the 18th century, the

research area of ICs in relation to OI and technology acquisition

has yet to be explored in significant depth [9–12]. Attention to

date has been focused on how such contests are designed and

classified based on their procedural characteristics, along with

the motivational aspects underpinning the participation of

different types of contributors. However, little is known as to

what happens to the winning idea or technology after the IC

process ends, and there is a clear gap in our understanding

Technological Forecasting & Social Change 80 (2013) 1563–1578

⁎ Corresponding author. Tel.: +44 1223 76483; fax: +44 1223 766400.

E-mail address: [email protected] (L. Mortara).

0040-1625/$ – see front matter © 2013 Elsevier Inc. All rights reserved.

http://dx.doi.org/10.1016/j.techfore.2013.01.008

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