Home Bias in Innovation Ecosystems: Relying on Local Users for Knowledge

Abstract

Innovation ecosystems enable small- and medium-sized enterprises to compete with innovations that include the knowledge of others. Integrating external knowledge in innovation is however a complex process, and there are many pitfalls to consider. This chapter analyses a small company that leverages its innovation ecosystem to compete in a dynamic global industry characterized by rapid technological change. The company faces the challenge of creating and commercializing a breakthrough innovation for digital education, with educational content for teachers and easyto- use authoring tools for modifying this content. As the company attempts to benefit from lead-user experiences, home bias towards knowledge from local users appears as an unexpected hurdle. The analysis of the case encompasses the firm, the industry, and the ecosystem levels, and indicates key concepts for innovation in ecosystem settings.