Customers involvement and firm absorptive capacity in radical innovation: The case of technological spin-offs

- Customers can facilitate or hinder a firm's quest for radical innovation.
- Absorptive capacity is needed to internalize customers' knowledge.
- Potential and realized absorptive capacities are critical to technological spin-offs.
- Market and technical knowledge are available from customers and research centers.
- Spin-offs need a blending capability to successfully develop radical innovations.

This study investigates how the absorptive capacity of scientific spin-offs affects the benefits and challenges of customer involvement in the development of radical innovations. We conducted 36 interviews in 3 spin-offs over 4 years to collect data regarding customer involvement in the development of radical innovations. The findings show the importance of spin-offs developing both potential and realized absorptive capacities to internalize customer knowledge and technology emergence awareness and to simultaneously offset customers' lack of technical knowledge in formulating their needs. Both market and technical knowledge appeared to be important for spin-offs, and these were available from both customers and the parent research center. The findings' main implication is spin-offs need a blending capability to balance between (1) market and technical knowledge, (2) market-pull and technology-push approaches, (3) the involvement of customers and parent research centers, and (4) potential and realized absorptive capacities. This study contributes a conceptual framework on the blending capability of customer involvement in the development of radical innovations and a set of propositions for future research.