Innovation by proxy in the media industry

By Bernd Müshenborn

11 January 2022 11:17

Innovation by proxy in the media industry

RaCE Master thesis: This qualitative case study examines how an established firm in the media industry is innovating and experiencing benefits from collaborative interactions with its spin-off companies.

Bernd Müshenborn. Private photo
Bernd Müshenborn. Private photo

This intriguing indirect form of innovating and the resulting benefits of this rather unique setting are coined “innovation by proxy”.

The findings present the resulting benefits for the established firm, its spin-off companies, and the media cluster that formed around the spin-offs, respectively.

The benefits for the established firm are found to be direct cost savings from implementation of the spin-off’s products, reduced acquisition cost of the spin-off’s products and financial gains from the ownership of the spin-offs through annual profits or through their increased valuation at the time of divestment.

Additionally, the established firm is benefiting from the product improvements and new product innovations that the spin-off generated in inbound open innovation activities with their customers.

The spin-off firms benefit from the relationship with established firm through ownership governance and the relationship to established firm as a customer, allowing the spin-offs to test and showroom their products.

Lastly, it is found that the spin-offs and other members of the media cluster that evolved around the spin-offs, benefit from the cluster by joint representation, facilitation of innovation activities and an emerging talent pool.

Supervisor: Professor Inger G. Stensaker, RaCE research project.