Firms that pursue a closed approach to innovation typically enjoy first-mover advantages.

Question

Quizplus · Accepted Answer

Firms in the closed innovation model are extremely protective of their intellectual property. This not only allows the firm to capture all the benefits from its own R&d, but also prevents competitors from benefiting from it. The mind-set of firms in the closed innovation model is that to profit from R&d, the firm must come up with its own discoveries, develop them on its own, and control the distribution channels. Strength in R&d is equated with a high likelihood of benefiting from first-mover advantages.

Firms That Pursue a Closed Approach to Innovation Typically Enjoy