Technology sourcing ambidexterity in corporate venture capital: limitations of learning from open innovation

In the rapidly evolving landscape of open innovation, understanding the dynamics of learning is pivotal for corporate success. Yet, the constraints and thresholds inherent in the novel technology sourcing processes remain under-explored. We study 163 firms during the third wave of corporate venture capital activity characterized by the primary focus on innovation to investigate the effects of technology sourcing ambidexterity (the simultaneous pursuit of internal and external sources of innovative ideas) on corporate patenting and realized innovation. Acknowledging limitations of organizational learning, our results indicate the presence of the inverted U-shaped relationship between technology sourcing ambidexterity and innovation and suggest that beyond a certain threshold, increases in ambidexterity are detrimental to organizational learning and corporate innovation because boundary conditions to experimentation as a key element to learning arise. Such restrictions are alleviated by organizational slack, which enhances organizational abilities to orchestrate resources and take calculated risks to go beyond existing internal competencies. Plain English Summary Proponents of open innovation suggest that combining internal and external sources of innovative ideas often leads to success. We demonstrate that this may be true in some circumstances, but there is a learning threshold for organizations. We argue and demonstrate that this combination, known as technological sourcing ambidexterity, is only beneficial up to a certain point, beyond which further investments in the dual internal-external search for innovative ideas are detrimental for reasons that have to do with organizational learning. Moreover, for those same reasons, the benefits are most likely to be observed for firms with substantial organizational slack. Lean organizations that do not have much slack are less likely to gain strategically from investing in technology sourcing ambidexterity.