How spatial proximity facilitates distant search – a social capital perspective on local open innovation

ABSTRACT Distant search has evolved from the open innovation literature as an efficient mechanism to access external knowledge from heterogeneous fields of expertise. Despite its popularity and proven benefits, companies face multiple barriers to benefitting from distant search. In this study, we explore a local open innovation approach in which the spatial distance between solution-seeking firms and problem solvers was deliberately reduced to combine the benefits of distant search with those of spatial proximity. We studied eight local open innovation events and found that spatial proximity supports the implementation of open innovation, overcoming challenges of initiating organisational change towards openness, establishing trusting relationships for knowledge exchange, and successfully applying the external knowledge. By identifying social capital as the key success factor in local open innovation, our study contributes to the theoretical foundations of open innovation by showing how the dimensions of social capital enable key actions in each process phase.