A BSORPTIVE C APACITY

A fundamental consideration that must be taken into account when adopting a Crowdsourcing business model consists in the ability of the firm to recognize, assimilate and apply external knowledge flows, namely Absorptive Capacity (Cohen, Levinthal 1990).

Crowdsourcing is not over at the end of the campaign; indeed, it is after that phase that firms have to translate in valuable resources all the collected material, and as it is possible to imagine it is not that easy to match external ideas with a consolidated organizational mind-set. As Cohen and Levinthal (1990) suggested, firms need to own a basic level of prior related knowledge to be able to manage innovation flows, otherwise it can happen a sort of misunderstanding in which the organization is not able to internalize external contributions in a profitable way. As a result, R&D capabilities and complementary assets have become crucial elements to be deployed to perform a successful integration process (Hossain 2016). Practically speaking, the two sides of the relation must be able to communicate at the same frequency, otherwise the entire process will be a waste in term of money, time and effort. The presence of the “relevant prior knowledge”, such as basic skills, shared language and also technological knowledge in the related field, is fundamental but not sufficient to reach the objective in the best possible way. All things considered, the individuals’ Absorptive Capacity of employees belonging to the organization, thus started to play a fundamental role in the innovation process (Cohen, Levinthal 1990).

Furthermore, it deserves to be pointed out that the Absorptive Capacity of the organization is not merely composed by the added value of the ones of its employees, but it

cumulatively develops till the firm is able to successfully exploit the external contributions, and not only to collect or assimilate them. Being this concept strictly intangible, it is not so simple to define the boundaries above which the optimal level can be considered as reached; for this reason, Cohen and Levinthal (1990) proposed a practical model.

The pivotal element in this theory is the investment in R&D, that « generates innovation and facilitates learning »; such investment is hence seen as the mean through which the investment in Absorptive Capacity is performed (Cohen, Levinthal 1990, p.149). As a consequence, firms that neglect the relevance of R&D investments will be considered less attractive and in some way obsolete, in “speaking the same language” of the external innovative flows to be integrated.

Similarly, when the external knowledge an organization wants to acquire is unrelated with its traditional activities, the organization itself must converge all its effort in the creation of Absorptive Capacity; otherwise, it will face the failure in combining new ideas with an incompatible innovation structure. Considering the R&D process no more as a whole, but disaggregating it in its two main stages, namely research and development, the Absorptive Capacity and its supportive strategies might differ in practical application from one stage to the other (Fujikawa, Motohashi 2017).

According to the studies proposed by Blohm et al. (2013), in raising Absorptive Capacity it is fundamental to develop five main capabilities, which work as a golden rule to drive the entire Crowdsourcing process to fruitful results. In fact, it is suggested to design CS platforms which maximizes the quality of the inputs, to early remove faint contributions, to integrate CS platforms in the organizational practices of the initiator firm, to manage the information exchange between the crowd and the initiator’s employees and lastly to foster the reaching of a critical mass of contributors embodying them into a community (Blohm, Leimeister et al. 2013). All these arrangements should be preparatory practices to an efficient innovation absorption process, and they can also be deemed as milestones of the business model.

A similar approach was adopted by Zhao and Xia (2016, p.7); when defining the capabilities required in a Crowdsourcing system, they refer to the « means that businesses or organizations pursue market opportunities with the public innovation resources and obtain commercial profits ».

As it is possible to see in Figure 10, considered capabilities about the initiator side are: Search Acquisition Capability, Absorptive Assimilation Capability, Commercialization Capability, Resource Investment Capability, Innovation Process Capability and Innovation

Management Capability28. From the authors’ point of view these capabilities are strictly connected, and are also necessary to accomplish a co-creation path with the crowd, through online CS platforms. These capabilities retrace the basic actions performed by firms, starting from the scanning phase of the collected contributions and the assimilation phase in which information is absorbed to be further transformed in commercialized products. In many cases, firm-specific-technology-related capabilities are the result of benefits from access of external technological inputs, the level of which depends on the grade of Assimilation Capacity of the organization (Zobel 2016).

Figure 10: Business requestor's capability of Crowdsourcing System (Zhao, Xia 2016, p.7)

Additionally, the Resource Investment Capability is affected by capitals, both physical and human one, that are employed in the R&D phase of Crowdsourcing products. This last element, in combination with the production and sales abilities, represents the integration of external resources and firm’s production factors in the so-called Innovation Process Capability. The Innovation Management Capability instead, refers to the activities performed by managers in integrating and coordinating the external knowledge flows with the corporate routine processes (Zhao, Xia 2016).

A counterintuitive situation is then proposed by Fujikawa and Motohashi (2017), who highlighted the fact that often organizations with important technological capabilities are not inclined in dealing with crowdsourced flows of innovation, preserving a sort of internal status quo, and thus lagging behind in respect with “less innovative” competitors. On the other hand, firms that are struggling to increase their technological efforts, are both more inclined and prepared to engage external knowledge flows to reach their goals (Fujikawa, Motohashi 2017).

For what concerns external contributions derived from Crowdsourcing initiatives, in facing the though issue of the integration management, Vanhaverbeke and Cloodt (2014) proposed a completely opposite strategy with respect to the Absorptive Capacity one. Specifically, outside-coming knowledge should be managed externally, rather than in an

28 _{For the sake of completeness, the proposed framework of Crowdsourcing capabilities comprehends, in} addition to the business requestors capability, the network platform capabilities and the public creativity (Zhao, Xia 2016).

“inward knowledge transfer”. In suggesting this approach, the authors refer to the first stage of the open innovation funnel, but probably, in the current Crowdsourcing field method could not be so efficient.

In order to create valuable outputs, it is worth considering even current trends towards the importance of Crowdsourcing ideation contests, where contributors’ ideas strongly need to be internalized in innovation processes by firm’s experts. If this kind of ideas, mainly with a broad-applicability, were managed outside the firm boundaries, there would be the risk to lose synergies and collateral positive effects from an unexpected use of materials. This risk would not exist or would not have been instantly detected if ideas were immediately processed by firms dedicated departments, that are able to gain benefits from all the facets of the collected materials. In conclusion, to reap benefits from Ideation Crowdsourcing, firms need to focus on their ability in deploying Absorptive Capacity, playing itself a fundamental role in translating ideas into viable outputs for firms.