A problem in the making: How firms formulate sharable problems for open innovation contests

Book chapter, 2018

Crowdsourcing in the form of innovation contests stimulates knowledge creation external to the firm by distributing technical, innovation-related problems to external solvers and by proposing a fixed monetary reward for solutions. While prior work demonstrates that innovation contests can generate solutions of value to the firm, little is known about how problems are formulated for such contests. We investigate problem formulation in a multiple exploratory case study of seven firms and inductively develop a theoretical framework that explains the mechanisms of formulating sharable problems for innovation contests. The chapter contributes to the literatures on crowdsourcing and open innovation by providing a rare account of the intra-organizational implications of engaging in innovation contests and by providing initial clues to problem formulation-a critical antecedent to firms’ ability to leverage external sources of innovation.