Open innovation for institutional entrepreneurship: how incumbents induce institutional change to advance autonomous driving

Without fundamental institutional change, such as a change in laws and regulations, many new technologies cannot achieve their full potential. Efforts to induce institutional change in favor of such technologies are, therefore, increasingly critical for innovative firms. To study how German automotive firms induce change that accommodates autonomous driving (AD) solutions, we conducted a case study research encompassing analysis of 31 interviews, internal archival documents, and media data. Taking the firm as the level of analysis, we identify ten practices employed by innovating incumbents in the three steps of creating saliency for change, mitigating reservations against the desired change, and institutionalizing it. We find that these practices involve shaping-oriented and adaptation-oriented knowledge flows. Through the combined use of these practices throughout the three steps, firms ‘open up’ their development process, utilizing purposive inflows and outflows of knowledge to advance innovation. Our findings contribute to the literature on open innovation and institutional entrepreneurship and suggest that future open innovation research can profit from adopting an institutional entrepreneurship perspective.