Closed-open innovation strategy for autonomous vehicle development

The automobile industry is faced with societal and market pressures to develop radically innovative cars for the future. The development of the autonomous vehicle (AV) is a strategic innovation in this area. This paper studies whether and how AV-innovation strategies at Tesla, BMW and Toyota are developed by using an open and/or closed innovation paradigm. More than ever, it appears that R&D departments of car manufacturers employ a combination of a closed and an open innovation strategy. In order to nurture their AV innovation strategy, they strategically decide which innovations to adopt from outside, and which parts of the R&D process to keep in-house. This paper presents and discusses the combined closed-open AV-innovation strategies used by three dominant car producers. It provides an insight in how they aim to gain a first-to-market position and sustainable competitive advantage in a new market segment of a highly saturated market.