Open Innovation Process and Firms Obsorptive Capacity

open innovation and absorptive capacity are two popular concepts in contemporary innovation management literature. firm's absorptive capacity, as it has been defined by Cohen and Levinthal (1990), determines their ability to in-source externally developed technology or ideas. In this paper, we tie these two concepts to each other and prove how the recent insights about open innovation can advance our understanding of absorptive capacity. External technology sourcing is becoming more important for a number of reasons: Shortening technology life cycles, emerging technologies with the potential to disrupt market leader's positions, sharing costs and risks associated with science based technology, globalization of the R&D activities as a response of companies to the greater dissemination of knowledge throughout the world, the growing importance of seed and venture capital to finance excellent business ideas, etc... These inter-organizational knowledge flows do not materialize automatically andfirms have to develop skills to tap into external sources of technology. Furthermore, absorptive capacity is crucial in explaining why some companies are better than others in creating and capturing value from in-sourcing externally developed technology and technological collaboration with innovation partners. Hence, absorptive capacity and the outside-in dimension of open innovation are necessarily linked to each other. The purpose of this paper is to analyze how absorptive capacity and the outside-in dimension of open innovation can be linked to each other. We focus on the question how complementary between internal and external technology plays a role in open innovation and absorptive capacity of innovating firms. This paper discuss about open innovation around two key factors (humanity & organizational) and relate it to absorptive capacity. Then analyses conceptual model with SWOT.