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Breaking the Chains of Open Innovation: Post-Blockchain and the Case of Sensorica

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Open innovation is a concept in flux; from the practice of large-scale, internet-mediated collaboration, to a strategic option and business model for firms. However, the scope and breadth of its transformative dynamic is arguably restrained. Despite the theoretical and empirical benefits of openness, established firms face significant challenges deploying the coordination patterns of open innovation communities, further reducing the potential of spill-overs in the supply chain. Viewed differently, open innovation presents more user-centric and responsible innovation paths. These are manifested in the processes and outputs of open innovation by empowering participation and by successfully employing the capacities of user communities. To reap the benefits of open innovation, a rapid reconfiguration of the production and exchange structures is needed in intrafirm and interfirm relations. Sensorica is an open enterprise that achieves such forms of organization and a unique techno-social infrastructure supporting them. It illustrates a potential path that can realize the full potential of open innovation, for users, firms, and the economic system as a whole.
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Article
Breaking the Chains of Open Innovation:
Post-Blockchain and the Case of Sensorica
Alex Pazaitis
Ragnar Nurkse Department of Innovation and Governance, Tallinn University of Technology, Akadeemia tee 3,
12618 Tallinn, Estonia; alex.pazaitis@gmail.com
Received: 5 January 2020; Accepted: 8 February 2020; Published: 14 February 2020


Abstract:
Open innovation is a concept in flux; from the practice of large-scale, internet-mediated
collaboration, to a strategic option and business model for firms. However, the scope and breadth
of its transformative dynamic is arguably restrained. Despite the theoretical and empirical benefits
of openness, established firms face significant challenges deploying the coordination patterns of
open innovation communities, further reducing the potential of spill-overs in the supply chain.
Viewed dierently, open innovation presents more user-centric and responsible innovation paths.
These are manifested in the processes and outputs of open innovation by empowering participation
and by successfully employing the capacities of user communities. To reap the benefits of open
innovation, a rapid reconfiguration of the production and exchange structures is needed in intrafirm
and interfirm relations. Sensorica is an open enterprise that achieves such forms of organization and
a unique techno-social infrastructure supporting them. It illustrates a potential path that can realize
the full potential of open innovation, for users, firms, and the economic system as a whole.
Keywords:
open innovation; open value network; commons; peer production; post-blockchain;
REA; Sensorica
1. Introduction
“It is mostly in periods of turmoil and strife and confusion that people care much about history;”
([
1
], p. 45). The same can be argued with the study of social sciences and, especially, economics.
Even more, the growing interest, both in popular and scholarly discourse, of alternative economic and
business forms indicates we are indeed in such a time.
Open innovation has sprung out of an expanding universe of practices and ideas around the
sharing of knowledge and ideas largely eectuated by Information and Communication Technologies.
The general logic is one of problem solving, exploiting a hitherto unseen capacity for large-scale
engagement and coordination of diverse contributors. As a phenomenon, open innovation relates
to a broad spectrum of practices, ranging from centrally planned and controlled processes like
crowdsourcing [
2
] and online labor markets, to more open and bottom up ones, such as commons-based
peer production (CBPP) [
3
]. Many dierent strategies can be identified for how the human resources,
capital, and degree of uncertainty are defined [
4
]. Yet, the underlying dynamic remains the same: a
generic capacity to employ knowledge in dynamic and uncertain processes. This capacity is gradually
aecting the way firms approach innovative activities, reshape their business models and, potentially,
their very nature.
In the innovation literature open innovation is mostly approached as a strategic option for firms
to employ external inputs [
5
7
]. On the one hand, a wide array of options unfolds, for both firms
and users, but on the other hand, the scope of this interaction remains limited. More radical models
concentrate on the virtues of CBPP, and develop structures and organizational patterns that better
Information 2020,11, 104; doi:10.3390/info11020104 www.mdpi.com/journal/information
Information 2020,11, 104 2 of 18
enable and support it. CBPP shifts the locus of innovation and production outside the boundaries of
either firms or networks and postulates an alternative view of value creation altogether.
Blockchain technology, which arose itself as a CBPP project, has evolved to attract even wider
attention. From the CBPP perspective, blockchains have been envisioned to support and stabilize its
value model, rationalizing openness and sharing in economic aairs. However, many dierent groups
with diverging political values are looking to deploy the functionalities of distributed ledger technologies
(DLTs) and heavily influence the relevant iterations and technological outcomes. Simultaneously,
the blockchains are yet to establish a viable dominant design. Still, DLTs have challenged the core
assumptions of the financial and monetary system, opening up a discussion where these matters become
relevant for an increasing fraction of society. Now, an ontological shift is necessary to break the chains
of open innovation through CBPP. Post-blockchain encapsulates such a vision of a blockchain-informed
transition that is not necessarily blockchain-driven.
The aim of this paper is to explore these emerging relationships between open innovation and
CBPP through a case study. Using an alternative view of open innovation as a starting point, I will
explore the inner dynamics of CBPP insofar as they enable and support sustainable and responsible
innovative activities. To this end, I will examine the case of Sensorica, an open enterprise based
in Montreal, Canada, producing open hardware sensor technologies. Sensorica is an emblematic
case of open innovation through commons-based organization. Its diverse community has devised
unique solutions to coordinate productive resources, employ the necessary knowledge and skills,
and successfully interface with the market. In addition, Sensorica has developed a pioneer accounting
system to track, assess, and distribute value that oers useful insights on how to capture value from
open innovation.
The case study of Sensorica, being part of an emerging phenomenon such as CBPP, posits several
challenges as a research project. First, the data gathered are very “thick” in the sense that they carry
along many elements from the context and environment in which they are embedded. Therefore,
it is often dicult to distinguish the research subject from the broader phenomenon, and vice versa.
Second, as an organization it has undergone, and is still undergoing, several transformations. Since the
beginning of this research, some of the observed elements and relationships, being themselves defined
in a dynamic fashion, have also evolved, along with a rapidly changing environment. Likewise,
the descriptions of the various components comprising its technological infrastructure are at dierent
stages of functionality and use in dierent times. Hence, the analysis mostly reflects the technical
feasibility and deployment of these features, even though their real-world use may dier. Therefore,
it should be clarified that the case is not presented as a fully functional automated system or a
crystalized organizational model, while its eventual form and very success need to be tested through
time. Nevertheless, the story of Sensorica, as it is unveiled through its extensive documentation,
online presence, and experiences of the dierent people involved, remains highly relevant and has
important lessons for organizational design based on open and distributed technological infrastructures.
In the following sections, a brief background is provided on open innovation and blockchain
technology, followed by a review of the resources–events–agents (REA) accounting model that
underpins the Sensorica infrastructure. Afterwards, I present the methods of the case study and the
case of Sensorica, which follows the formulation of a narrative based on interviews with key persons,
along with data retrieved from their rich and freely accessible documentation. Finally, I will discuss
the main outtakes and draw some conclusions.
2. Background
2.1. Open Innovation: From a Strategic Option to a New Innovation Paradigm
The concept of open innovation signifies a paradigmatic change in the way firms approach
innovative activities [
8
]. Open innovation has been largely documented and popularized by
Chesbrough [
5
,
9
,
10
] to contrast traditional, vertical Research and Development. In open innovation,
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knowledge flows and market paths from internal and external origin are conflated in innovative firm
activities, triggering larger implications in the respective business practices and structure. The firm
boundaries become less definite and network-based forms of organization gain prominence in
successful strategies.
However, there are still a few problems with the adoption of open innovation. First, the current
discourse is mainly restrained in a rather instrumental level. That is, in the way firms coordinate inflows
and outflows of knowledge and ideas to advance their technological capacities and introduce successful
market strategies. From a more critical reading [
11
], open innovation oers not much more than a puery
term to discuss well-established concepts in innovation literature, such as absorptive capacity [
12
],
external linkages [
13
], complementary assets [
14
], or exploration and exploitation [
15
]. From this
perspective, the view of open innovation as old wine in new bottles [
16
] is not completely unjustified.
Moreover, open innovation has been increasingly treated and presented as a strategy rather than
a radically new paradigm [
17
]. Although the strategy part is increasingly supported by empirical
evidence in larger or smaller firms [
18
20
], many of the challenges of its paradigmatic significance
still remain unsolved. Most importantly, the “paradox of openness” [
21
] quite concisely describes
the tension between the otherwise self-evident virtue of knowledge sharing and collaboration with
diverse actors, and the ability to capture the returns in the market. Despite the increasingly accepted
virtue of openness exemplified in successful digital innovations, a set of “anomalies” still remain for
established firms, which pertain to ownership over resources, exclusive rights, and barriers of entry [
17
].
This way, open innovation is often reduced to what is referred to as “strategic openness”—which
might as well be “strategic closedness” (The point on strategic openness/closedness was made by free
software pioneer Benjamin “Mako” Hill in his keynote at LibrePlanet 2018 conference. For details
see: https://boingboing.net/2018/06/21/digital-enclosure.html)—with open innovation sleepwalking
between an oversold hype and a necessary transition.
Conversely, open innovation is arguably linked to more radical transformations in the way
productive processes incorporate knowledge to create more socially meaningful outcomes. Theoretical
approaches under “user-driven innovation” or “free innovation” [
22
24
] and “commons-based
innovation” [
25
] have come to validate and reinforce the understanding of innovative activities as
fundamentally collective and synergetic. Simultaneously, they provide a more political connotation
that also considers the accountability of innovations towards their users and the systems upon which
they rely. It is then the task of innovative firms to translate this relational dynamic into valuable
products and services.
Arvidsson et al. [
26
] spoke of a “crisis of value” showcasing a turning point in the way our
value regime recognizes new value and how this is created. Novel forms of social production,
like commons-based peer production (CBPP) [
27
], have illustrated new pathways of value creation and
distribution. A growing ecosystem of free and open-source software projects and the free encyclopedia
Wikipedia have showcased how loosely-aliated individuals can communicate and self-organize over
peer-to-peer infrastructures and co-create use-value that is freely accessible as commons [27].
In CBPP, value is collectively contributed and distributed through participatory practices, and the
shared outputs are used in new iterations [
27
]. There are several strategic advantages and eciency gains
stemming from CBPP [
28
]. The modular design of CBPP projects allows more, diverse, and independent
agents to join the production process, while keeping the transaction costs significantly low. Moreover,
the dierent modules are also often granular, which mobilizes agents’ high varying levels and qualities
of motivations. Yet, integration at low-cost is a core characteristic of CBPP projects, due to the
transparency and interoperability of the dierent modules. CBPP features a broader spectrum of
options for the functionality and association of dierent modules, along with shared protocols for
their fixation, thus solving many of the integration and optimization problems often imputed to
modularity [29].
This cycle of open input, participation, and commons-oriented output signifies dierent nuances
of openness. It provides an enabling environment for human creativity to flourish and often leads
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to sophisticated, improved, and adaptable innovations. A broad spectrum of products speaks for
this potential, from the GNU/Linux operating system, the Apache HTTP Server, Mozilla Firefox web
browser, and Wordpress content management system, to the RepRap open hardware 3D printer,
and open design technologies like Wikihouse or Farm Hack. CBPP projects extend and reformulate the
meaning of open innovation, from a mere strategic option to integrate external knowledge resources,
to a relocation of a firm’s productive capacities. The commons, then, provide a new locus of freely
circulating knowledge and learning beyond the confines of the firm.
However, the value of this form of innovation largely remains unaccounted for. Innovation,
as conceived and appreciated in our times, has been interwoven with the capitalist enterprise. Yet,
Schumpeter himself would most probably argue for the function of innovation permeating the confines
of the capitalist political economy [
30
]. It embodies a quality that would be manifested in any dierent
setting associated with dynamic change and novelty. From this perspective, if open innovation
constitutes a more radical transformation of innovation capacities, this would simultaneously require
both functional and institutional changes.
2.2. Blockchain Technology: Reworking Value
Blockchain technology has been said to envelop the potential to “rework fundamental systems
and institutions that define modern society, including payment systems, financial markets, commercial
agreements, and many of the organizational structures that populate our society” [
31
] (p. 10). The power
of distributed ledgers and smart contracts promises to eliminate friction and radically reduce the
costs of transactions, while increasing security, verifiability, and transparency [
32
]. These features
are particularly relevant to business and industrial organizations, allowing the optimization and
automation of manufacturing and transactions [
33
]. Likewise, in supply chain management and
logistics, providing a single, verified state of aairs almost simultaneously across the involved agents
can be crucial [
34
]. Being itself an open technology, blockchain allows for a greater degree of agility
and a distribution of power that can create favorable conditions for open innovation.
Yet, many of these claims are still premised on assumptions and practices that are prone to the
same pitfalls of today’s economy. The logic of transactions unveils an adherence to private or exclusive
ownership and control of resources and the power dynamics that come along. Then, verifiability and
transparency may simply serve the most powerful nodes of the system to control and coerce production
and impede destabilizing factors.
Elsewhere [
35
], we have explored and analyzed these elements of blockchain technology,
but premised on a tentative transition of a value regime led by CBPP. The latter provides a new
basis for meaningful contributions to societal needs, by replacing private ownership and control
with collective self-management; hierarchical command of labor with peer-to-peer coordination;
and the production of surplus value with social value. Seed forms of commons-oriented enterprises
develop their systems of value representation to encapsulate the polycentricity, fluid coordination,
and multiplicity of contributions found in CBPP. They rationalize new types of meaningful social
relations, along with the institutions that make the accompanying value forms perceptible.
So, blockchains can make new value forms perceptible, but blockchains alone cannot guide a
tentative transition towards them. Blockchains can support the functionality of several components of
large-scale mutual coordination, but are not flexible enough to support the multifaceted requirements
it entails. The architecture of many DLTs, despite being distributed, still very much functions as a
platform, in the sense that all nodes run the same code and logical sequence. CBPP is a complex,
asynchronous process, involving diverse agents, both individuals and organizations, that engage in
various contributions and need to act independently, while remaining interoperable [36].
A new generation of DLTs has been striving to develop tools that cover the aforementioned
requirements [
37
]. For instance, the Economic Space Agency (https://economicspace.agency) introduces
a stack of tools to support the operation, finance, and cooperation of “open-source economic spaces”,
i.e., autonomous, commons-based ventures engaging in any sort of economic activity. These entities
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can deploy smart contracts, optimize and issue crypto-tokens embodying their internal productive
relationships and ethics, and use them to attract investments that are not only looking to profit,
but also support and expand these relationships. Likewise, DAOstack (DAO stands for “Decentralized
Autonomous Organization”. For details see: https://daostack.io) features a technological infrastructure
to support resilient collaboration at scale between decentralized organizations. The project largely
builds on the idea of Backfeed [
35
], with the dierence being that instead of a shared protocol between
dierent projects, DAOstack envisions diverse teams developing dierent protocols, embedding their
values and principles. The distribution of crypto-tokens serves to coordinate these teams and their
interaction with the rest of the system to incentivize investments.
Finally, Holochain (https://holochain.org) has developed an alternative proposition to distributed
ledgers, introducing instead a generic framework for distributed applications [
37
]. Holochain takes an
agent-centric approach, where diverse agents, individuals, organizations, or even bots share distributed
data. Access is granted only to the data that are useful or relevant for every agent, while validation is
based on a shared set of rules across the nodes. Most DLTs typically require all nodes to synchronize
with a common state. Instead, Holochain establishes a shared set of rules and requires nodes to
cryptographically verify it for every action against their own record. This architecture solves many of
the scalability issues of blockchain technology, allowing more agency for applications to develop and
enforce their own rules, while maintaining the system’s interoperability.
The experimentation of alternative architectures is not only motivated to address the scalability and
energy-use issues of blockchain technology. Rather, they are purposely developed to better adopt new
forms of value creation that are based on shared resources and peer-to-peer collaboration. Open and
collaborative economic forms increasingly influence the common sense of the future business models
and are called upon to mitigate some of the most pressing societal and ecological problems of our time.
A significant part of the world’s engineering talent is dedicated to building tools to further strengthen
and stabilize these forms.
2.3. Resources–Events–Agents: A Post-Blockchain Accounting Model
The new forms of productive coordination and value creation surfacing in the digital economy
have exacerbated some of the limitations that double-entry bookkeeping had already been facing
in covering the needs for accounting information. McCarthy [
38
] identified four main categories of
such deficiencies:
1.
Limited dimensions: Double-entry elements almost exclusively express monetary representations.
This does not allow for representations of other valuable, multidimensional data, such as
productivity, performance, and reliability;
2.
Not (always) appropriate classification schemes: The categories used to represent the information
related to the economic aairs of an enterprise are limited to accounting objects. This often
omits data that do not fit these categories, while it organizes data in ways that are of little use
to non-accountants;
3.
High-level aggregation for stored information: The aggregation of accounting data takes place
on a level that only informs executive decision-making and the relevant information concerning
economic activities is not available in a primary form to be aggregated on a dierent level,
where dierent forms, quantities, and foci are needed to serve other functions;
4.
Restricted degree of integration with other functional areas of the enterprise: Accounting data
concern representations of various phenomena, which are often separately documented by
non-accountants in dierent forms. This leads to inconsistencies, overlaps, and information gaps.
In the face of these limitations, resources–events–agents (REA) has been presented as a model for
accounting systems re-engineered for the information age. It was originally presented by McCarthy [
39
]
as a generalized framework designed to cover accounting needs for enterprise environments, utilizing
shared data amongst their functional constituents. The main motivation behind the development
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of REA was the limited capacity of double-entry bookkeeping to facilitate information flows in
post-industrial business entities.
These limitations are addressed by the REA framework through a semantic approach that aims to
reflect real-world business activities rather than double-entry accounting objects [
40
]. As the name
implies, the model creates computer objects that represent: (a) resources (e.g., goods, services, cash,
assets); (b) events (e.g., processes, transactions, agreements, contracts); and (c) agents (e.g., individuals,
groups of individuals, entities, machines). REA preserves the duality of economic events that is typical
of double-entry, retaining the causal relationship between inflows and outflows. For instance, in a
productive process, several resources (e.g., components, labor time, machine time) are employed as
input, and in turn produce other resources (e.g., products, parts). Simultaneously, REA identifies
the agents involved in these events and connects the activities with stock flows, which represent
resources moving from one activity to another [
41
]. This way, it integrates all the planning, monitoring,
and communication functions, providing greater granularity of data to eectively track the economic
activities and inform decision-making [40].
The technological roots of the REA model reach back to the development of relational databases
in the 1970s [
39
]. The double-entry-based accounting entries then impeded their transformation to
database form, as they created data redundancies and decreased data integrity, which violated the
rules of normalization. McCarthy’s [
39
] solution simplified this process, while providing the same
options for financial reporting.
Even though the model in its initial form did not provide significant benefits for business
operations, it has opened up the development of accounting solutions apt for databases. In this
direction, Enterprise Resource Planning (ERP) systems emerged, which follow normalized databases,
oer significant advantages in terms of cost reduction and user experience [
40
]. Recently developed
enterprise systems, such as Workday and REA Technology, have applied the core of the model in their
architecture, while many ERP systems that do not fully embrace the REA accounting model are still
largely consistent with the design theory [40,42,43].
Nevertheless, REA has not yet been widely adopted in business due to path dependencies with
the traditional accounting practices. Most ERP systems are consistent with double-entry bookkeeping
artefacts in the way they provide information for their applications and thus include add-on general
ledger modules for the relevant accounting tasks [
44
]. As this type of information is mainly handled
by accountants and financial managers, they, in turn, prefer ERP systems to be designed in a way they
are more familiar with.
The rapid changes in the structures and business logic of enterprises in the information economy
necessitate greater agility from information systems. The demanding business climate rationalizes
collaboration and integration across the value chain, in the form of clusters (Porter, 1990; 2000) or
strategic alliances [
45
], challenging the definition of corporate boundaries. The semantic representation
of the enterprise reality oers such agility in a greater degree than on artificial constructs [46].
New enabling technologies and business models transcend the limits of the value chain towards
an approach comprising “value systems” [
47
], including all the interconnected economic agents
and resource inputs involved in productive processes. The REA as a design theory can provide a
common vocabulary to enable the coordination of all involved parties in integrated enterprise and
inter-enterprise systems [
40
,
41
]. Individual entities and their respective records matter less in this view,
while the focus is on resource flows. It poses as a discontinuity in the design paradigm of electronic
accounting systems, where instead of focusing on the automation of traditional accounting artefacts,
it conceptualizes a new way of representing the complex economic reality.
Research on REA has also progressed in recent years and the model has gradually evolved
from a generalized framework to a design theory for enterprise systems with a semantic orientation.
REA already forms the basis for the International Organization for Standardization/International
Electrotechnical Commission (ISO/IEC) standard 15944 for Information Technology—Business
Operational View, Part 4 “Business transaction scenarios—Accounting and economic ontology”
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(ISO/IEC 19544-4:2007), specifying the concepts and relationships for business transactions in
open-electronic data interchange. Moreover, with distributed ledger technologies gaining additional
attention in supply chain management systems and business networks, the ISO standards committee
is further looking into the creation of a blockchain standard, which also involves the participation of
REA experts [36].
With this, I return to the main motivation behind this paper: to examine the REA model as an
enabling medium for representing the economic reality of CBPP. So, without getting into more detail of
the technical aspects of the REA model itself, I attempt instead to provide an overview of one of its
arguably paradigmatic implementations. To this end, I present the case of Sensorica.
3. Materials and Methods
This paper was based on a case study, to gather and analyze diverse empirical data provided by
the examination of an individual case and thus reflect on a broader phenomenon [
48
]. The value of
the case is intrinsic, in that it is, “in all its particularity and ordinariness” of great interest in the way
it reveals its story [
49
] (p. 237). Nevertheless, the case selection was purposive [
50
], as it illustrated
an organization specifically designed for CBPP, which has successfully introduced innovations in
the market.
Acknowledging the importance of diverse research techniques in case study research [
48
],
a combination of multiple sources of data gathering was used, including interviews, as well as internal
sources of documentation and a variety of online tools typically utilized by the Sensorica community,
which provided further data for triangulation [51].
As, by definition, Sensorica avoids rigid hierarchical structures, the individuals targeted for the
interviews should be considered key informants rather than gatekeepers. Sensorica has been highly
influenced by the principles of peer governance [
52
] and have adopted a bottom-up decision-making
system based on consensus, mutual validation, and meritocracy.
The interviews were semi-structured and emphasis was placed on providing flexibility for the
interviewees to discuss what they deemed most important. The goal was to establish a dialog with the
interviewees, in the form of a “guided conversation” [
48
] (p. 236) to reach a common understanding of
the issues explored. The interviews were structured around certain base questions and probes that
attempted to elicit data regarding their goals, desires, and ideologies, as well as their coordination and
development methods. In total, three interviews were conducted using a video call tool due to large
geographic dispersion of the interviewees and time limitations. The interviewees were anonymized to
avoid potential impacts from the exposure of their views.
Lastly, data were gathered from Sensorica internal documentation (reports, agreements,
working documents, etc.), as well as from an overview of the accounting system for specific projects,
which is openly accessible in most parts. Data from online platforms, fora, discussion sections,
and documentation (audio-visual material, reports, articles, blog posts) available were also studied,
as well as email communications with individuals. Given the fact that openness is a principle
permeating such initiatives, there are rich and diverse sources available for the mining of research
data. Like the interviews, key documents and discussions were selected that provided the most insight
in each sub-case, shedding light on the intricacies of the technology development, as well as the
participants’ incentives.
4. The Case of Sensorica
4.1. General Overview
Sensorica is a collaborative network, established in 2011 in Montreal, Canada, dedicated to the
design and deployment of sensors and sense-making systems. Inspired by free and open-source
projects, the vision of Sensorica has been to devise an appropriate business model and support
infrastructure to make such forms of production economically sustainable.
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Sensorica is arguably more complex than a traditional enterprise. It is a productive network
that is simultaneously a commons-based community, as well as a market-oriented entity. On one
hand, individuals and organizations pool resources to initiate projects, driven primarily by intrinsic
motivations, rather than financial rewards. On the other hand, the innovative solutions developed in
Sensorica are introduced to the market to generate income by “exchange firms”. The latter refers to
independent internal or external entities which undertake marketing and logistics operations while
being liable for maintaining ethical and quality standards of the solutions [53].
Sensorica identifies itself as a new type of organization, which is referred as an Open Value
Network (OVN, see Figure 1) [
54
]. An OVN is a generic organizational and business model, which could
possibly enhance and support commons-based peer production. As an organization it is highly
adaptive, fully decentralized, and governed through distributed decision-making processes and
resource allocation [
55
]. As the name implies, it supports open participation, has very low barriers of
entry, and is designed to empower permissionless individual action through open knowledge and
transparent processes.
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independent internal or external entities which undertake marketing and logistics operations while
being liable for maintaining ethical and quality standards of the solutions [53].
Sensorica identifies itself as a new type of organization, which is referred as an Open Value
Network (OVN, see Figure 1) [54]. An OVN is a generic organizational and business model, which
could possibly enhance and support commons-based peer production. As an organization it is highly
adaptive, fully decentralized, and governed through distributed decision-making processes and
resource allocation [55]. As the name implies, it supports open participation, has very low barriers of
entry, and is designed to empower permissionless individual action through open knowledge and
transparent processes.
Figure 1. Open Value Network (Adaptation by the author and Nikos Exarchopoulos from Siddiqui,
Y. and Brastaviceanu, T. Open Value Network: A framework for many-to-many innovation. Available
online: https://docs.google.com/document/d/1iwQz5SSw2Bsi_T41018E3TkPD-
guRCAhAeP9xMdS2fI/pub#h.pkzfosme7qaf. (Licence: CC-BY 3.0).
4.2. Organization: The Open Value Network
The OVN is characterized by three fundamental principles: open membership, transparency,
and variety of contributions [55]. Open membership means that members can freely join or leave the
network and form, join, or acquire enterprise entities. Also, members can be individuals of diverse
backgrounds or organizations, including non-profits, government entities, enterprises, or even other
OVNs. Transparency enables the open-source communities to gain access to information, knowledge,
and processes, with certain restrictions regarding specific types of resources that may need to be
handled exclusively by special expertise (e.g., dangerous chemicals may be restricted to chemists).
Finally, a broad spectrum of contributions can take place, including material (e.g., resources, tools,
consumables) and immaterial inputs (e.g., time, effort, information) or capital (e.g., financial
investments, space, equipment, infrastructure).
The aspiration of the OVN model is to create a viable structure that harnesses the advantages of
open collaboration and sharing, while it addresses the challenges of open-source projects related to
governance and sustainability. Its economic dynamics are based on large scale collaboration and on
customized production to create economies of scope. The OVN takes advantage of the diversity of
inputs and shared resources to create innovative solutions and effectively reduce time-to-market for
innovations. Through diversity and variety, a unique potential is created and exploited by the linked
business entities in an attempt to become competitive in the market. At the same time, the OVN
model provides solutions for open-source projects, so that they can effectively capture, manage, and
Figure 1.
Open Value Network (Adaptation by the author and Nikos Exarchopoulos from Siddiqui, Y.
and Brastaviceanu, T. Open Value Network: A framework for many-to-many innovation. Available
online: https://docs.google.com/document/d/1iwQz5SSw2Bsi_T41018E3TkPD-guRCAhAeP9xMdS2fI/
pub#h.pkzfosme7qaf. (Licence: CC-BY 3.0).
4.2. Organization: The Open Value Network
The OVN is characterized by three fundamental principles: open membership, transparency,
and variety of contributions [
55
]. Open membership means that members can freely join or leave the
network and form, join, or acquire enterprise entities. Also, members can be individuals of diverse
backgrounds or organizations, including non-profits, government entities, enterprises, or even other
OVNs. Transparency enables the open-source communities to gain access to information, knowledge,
and processes, with certain restrictions regarding specific types of resources that may need to be handled
exclusively by special expertise (e.g., dangerous chemicals may be restricted to chemists). Finally,
a broad spectrum of contributions can take place, including material (e.g., resources, tools, consumables)
and immaterial inputs (e.g., time, eort, information) or capital (e.g., financial investments, space,
equipment, infrastructure).
The aspiration of the OVN model is to create a viable structure that harnesses the advantages of
open collaboration and sharing, while it addresses the challenges of open-source projects related to
Information 2020,11, 104 9 of 18
governance and sustainability. Its economic dynamics are based on large scale collaboration and on
customized production to create economies of scope. The OVN takes advantage of the diversity of
inputs and shared resources to create innovative solutions and eectively reduce time-to-market for
innovations. Through diversity and variety, a unique potential is created and exploited by the linked
business entities in an attempt to become competitive in the market. At the same time, the OVN model
provides solutions for open-source projects, so that they can eectively capture, manage, and distribute
financial rewards to the contributors; deals with issues related to trust; retains and protects a formal
legal structure and brand; and formulates and executes a business strategy.
To achieve this, the Sensorica OVN rests on a techno-social infrastructure that reinforces
decentralized organization and renders the network ecient and sustainable. It utilizes the REA
model to coordinate diverse agents, either individuals or business entities, in a flexible manner,
considering their legal and ownership arrangements. It also performs all the traditional business
functions, including Research and Development, coordination, production, distribution, marketing,
sales, distribution of revenue, and legal liability. Simultaneously, it keeps track of the dierent
contributions in a transparent network-based system, which allows the created value to be fairly
distributed within and beyond the network.
The Canadian Academy for the Knowledge Economy (CAKE) is a nonprofit organization that all
the agents of the network are aliated with. As a caretaker of the network’s assets, it manages the
shared pool of the network’s resources in such a way that large-scale collaboration is fostered without
compromising the fair distribution of value [
55
,
56
]. Towards this goal, a “non-dominium” agreement
is used that excludes the domination of an agent over the shared system.
4.3. Technological Infrastructure: Contributory Accounting and Network Resource Planning
The OVN infrastructure comprises three main interlocking systems [
57
]: (a) a Contribution
Accounting System (CAS) (in previous versions, Sensorica’s accounting system was referred to as
Value Accounting System (VAS)), which records and evaluates every member’s input and calculates
revenue in proportion to each contribution; (b) a reputation system, which determines the behavior
within the community and attributes merit in accordance with the collective interest; and (c) a role
system, which allocates the arrangement and interrelation of the dierent activities among the agents,
based on their skills and interests. The reputation system fulfils an important function to regulate
value creation and the flow in the network by filtering participants for the tasks to be undertaken.
Specifically, reputation is linked with the voluntary commitments that people make for the
work that needs to be done in the network. These commitments may be connected to one or more
deliverables, which in turn are required by other processes. Reputation is gained when someone
fulfills their commitment, and is reflected in the subsequent processes and the people involved. At the
time of writing, the system keeps track of the dierent types of work conducted (e.g., electronics,
3D design, prototyping) and generates an accumulated score based on the hours worked by each
person [
58
]. Likewise, an additional function is sought to be integrated to also include the quality of
the work completed.
Respectively, roles weigh the significance of a certain task with regards to the distribution of
value in a certain project. For every project a value equation is created that is decided among the
participants. The various tasks to be performed are weighed according to their contribution to the
project. For instance, in a certain project, one hour of engineering work can be equated to two hours of
manufacturing. Similarly, the participants in one project may prefer an egalitarian value arrangement
or a more meritocratic one [59].
The aforementioned systems enable the OVN to track and evaluate the contributions, as well
as redistribute revenue produced in the market. The Sensorica CAS is a contribution-based reward
system, which proportionally redistributes revenues to the related projects based on each contribution.
The logged contributions are evaluated through a metrics system, while participatory evaluations
by the members can also be an option [
60
]. The aggregated data generated by the CAS are fed into
Information 2020,11, 104 10 of 18
the other two systems, which in turn support the CAS. This way, the system generates a permanent
quantitative and qualitative record of all contributions, in terms of who is doing what (role), how well
(reputation), and how much (value) in a particular project.
The dierent dimensions of value are made commensurable using a value equation system,
which attributes a percentage of the total revenue to every participant, in the form of “fluid equity” [
61
].
The fluid equity of every contributor in a certain project is visually represented in the form of a pie-chart,
illustrating its share of the potential revenue related to the project. That is, if exchange value is created
in the market, the CAS guides the redistribution of the revenue to the contributors.
Given that the OVN is a dynamic structure, certain types of contributions are simultaneously
associated with the creation of new resources [
62
]. For example, a design or a prototype which has been
contributed to one project represents a resource that can be used in a dierent context. To facilitate the
interoperability of the resources in dierent projects, the CAS is complemented by a Network Resource
Planning (NRP) (in other sources, NRP is also referred to as “Network Requirements Planning”) system
that matches resources with certain value streams.
The NRP is an Enterprise Resource Planning (ERP) type of software based on the REA model to
support the complexity of operations in an OVN. It collects, stores, and interprets data from all the
dierent types of activities in the network and connects them to specific resources, events, and agents
to keep track of the contributed value on resource level.
In NRP, everything is connected together. Economic agents are associated with other agents and
participate in events of various types, such as processes, exchanges, or transfers. Events change the
state of resources by using, citing, consuming, creating, or transferring them. A certain resource may
be an output from one event and then an input to another one. Those events are then again connected
with a resource flow.
More specifically, the REA model operates in three levels in the NRP (see Figure 2) [
63
,
64
].
The first level concerns the definition of “types” (or recipes). These define resources, processes, agents,
or events associated with productive activities in the network. The second level refers to “plans”,
which entail dierent forms of commitments for scheduled activities, including productive processes,
orders, transactions, or purchases. Finally, the level of “events” (or actuals) contains all the dierent
economic occurrences that eectuate changes in the quantity or ownership of resources, performed by
the participating agents. Each event has a respective definition on the type level and entails dierent
commitments on the plan level. Dierent processes connect the events level with the plan level, as they
contain inputs and outputs related to either commitments or economic events. Projects define the
context where dierent things or processes are involved in one of the three levels.
The NRP integrates the function of the CAS in Sensorica, by allowing the re-use of resources
in dierent contexts. This is especially relevant in the case of CBPP, which relies on the circulation
of digital commons, which are abundant and can thus be utilized simultaneously in many dierent
contexts. In turn, further utilization of the associated resources results in further increase in the
aggregated use value for the network. The NRP-CAS thus enables the advantages of network eects,
while eectively supporting the complex underlying relations.
At the same time, the NRP-CAS supports the expansion of the OVN, as it may attribute equity to
resources generated by external sources and integrate them into the network [
52
]. For example, a piece
of open-source software code, which has been developed by non-members of Sensorica, can be used
within a Sensorica project to compile a final product that is then exchanged in the market. The external
developer is given a percentage of fluid equity in the project and a proportional distribution of any
revenue. This way, the OVN can connect creative communities in mutually beneficial terms with the
NRP-CAS providing the common language.
Information 2020,11, 104 11 of 18
Information 2020, 11, x FOR PEER REVIEW 11 of 18
Information 2020, 11, x; doi: FOR PEER REVIEW www.mdpi.com/journal/information
Figure 2. The Sensorica NRP-CAS structure (Available online: http://nrp.sensorica.co).
4.4. Projects and Operation
In Sensorica, government grants or market operations generate income. The NRP-CAS enables
revenue to flow back to its contributors based on the quality of each contribution. The latter is
evaluated via peer review techniques and self-logging, eliminating rent-seeking behaviors and
reciprocating benefits to network through common value creation. Thus, a sense of fairness
permeates Sencorica’s techno-social infrastructure, which, in turn, supports its network’s
contributions and operations.
Regarding the initiation of Sensorica’s projects, the related processes can take place either
internally or externally. Ad hoc projects can emerge through discussions set off by the network
participants. By engaging more people in the network, the planning and research process takes place,
followed by the arrangement of the NRP-CAS. The development of the project is thus fostered,
including contribution records of the participants, marketing, and accounting processes.
There are typically nine steps to initiate an endogenous project in Sensorica [65]:
1. Project idea: People begin broadcasting an informal proposal in the Sensorica forum or through
other media. The rationale and main idea are discussed and explored;
2. Creating an official project: After a round of informal discussion, a formal procedure to create a
project is followed, based as set of shared instructions [66], methods, and templates provided
[67];
3. Building capacity and communication strategy: The project participants agree on the procedures
for project execution and the appropriate communication channels and coordination tools;
4. Establishing project structure: A minimum working structure is developed, comprising, at least,
the description of the project’s (a) governance, including the rules of conduct, conflict
management, and distribution of rewards; (b) roadmap, including important milestones and
plans; and (c) custodian agreement, signed by the custodian to administer the relevant funds;
5. Creation of a core team: After the conditions for communication and structure have been agreed
upon, a core team of instigators is formed and they reach out to the network to map interest,
gather feedback, and create incentives for participation;
Figure 2. The Sensorica NRP-CAS structure (Available online: http://nrp.sensorica.co).
4.4. Projects and Operation
In Sensorica, government grants or market operations generate income. The NRP-CAS enables
revenue to flow back to its contributors based on the quality of each contribution. The latter is evaluated
via peer review techniques and self-logging, eliminating rent-seeking behaviors and reciprocating
benefits to network through common value creation. Thus, a sense of fairness permeates Sencorica’s
techno-social infrastructure, which, in turn, supports its network’s contributions and operations.
Regarding the initiation of Sensorica’s projects, the related processes can take place either internally
or externally. Ad hoc projects can emerge through discussions set oby the network participants.
By engaging more people in the network, the planning and research process takes place, followed
by the arrangement of the NRP-CAS. The development of the project is thus fostered, including
contribution records of the participants, marketing, and accounting processes.
There are typically nine steps to initiate an endogenous project in Sensorica [65]:
1.
Project idea: People begin broadcasting an informal proposal in the Sensorica forum or through
other media. The rationale and main idea are discussed and explored;
2. Creating an ocial project: After a round of informal discussion, a formal procedure to create a
project is followed, based as set of shared instructions [
66
], methods, and templates provided [
67
];
3.
Building capacity and communication strategy: The project participants agree on the procedures
for project execution and the appropriate communication channels and coordination tools;
4.
Establishing project structure: A minimum working structure is developed, comprising, at least,
the description of the project’s (a) governance, including the rules of conduct, conflict management,
and distribution of rewards; (b) roadmap, including important milestones and plans; and (c)
custodian agreement, signed by the custodian to administer the relevant funds;
5.
Creation of a core team: After the conditions for communication and structure have been agreed
upon, a core team of instigators is formed and they reach out to the network to map interest,
gather feedback, and create incentives for participation;
Information 2020,11, 104 12 of 18
6.
Establishing incentive structure: A structure is developed to motivate potential contributors,
including a market plan and a plan of the necessary resources, including skills, equipment,
materials, and financial resources;
7.
Expanding the team: Once the incentive structure is set, a process of outreach, onboarding and
engagement, and information mining begins to attract the necessary talent and resources;
8.
Planning activities: The activities needed for the project implementation are systematized and
formalized in the NRP-CAS using “workflow recipes” [
68
], i.e., a set of pre-defined descriptions
for a series of processes and distributions of tasks;
9.
Documentation: All activities in Sensorica are followed by extensive documentation in the project
website, as well as in a main shared document, which functions as an index for various working
documents concerning major components.
For example, the “Mosquito” technology, a force-displacement sensor, exemplifies how a project
can start internally in Sensorica. It was launched in 2012 under the coordination of 15 network
participants, who undertook several roles, ranging from design and development to marketing
and documentation. In 2013 the company Tactus Scientific Inc. introduced the Mosquito Scientific
Instrument System into the market. Being initially tested in cardiovascular diseases, it has now
expanded its use in robotics and wearables.
Similarly, Sensorica’s network can undertake innovation processes of projects that have been
outsourced by external parties. For instance, the development of an Internet-of-Things solution was
outsourced to Sensorica by a Montreal-based company in 2015. Following the Sensorica’s modus
operandi and openness values, the company agreed to release the product under open-hardware license.
In addition, it financed CAKE—the network’s custodian—to distribute revenue to the participants
in the product’s development process. Based on the data available in the Sensorica NRP-CAS [
69
],
686 contributions were made in various tasks, ranging from software design, electronics, and optics
development to admin and documentation work, generating over 60,000.00 CAD in income for the
eleven aliates participating in the project [70,71].
In general, Sensorica has been able to sustain its operation for almost a decade. Based on the
latest available data [
72
], a rough estimate of 330,000.00 CAD has been raised since 2011 in grants and
loans, while revenue from commercial activities has been ranging around an average of 50,000.00 CAD
annually, from 2015 to 2018. At the time of the writing, about 30 aliates were active in Sensorica, who,
between 2016 and 2017, had invested an aggregate of almost 6000 h of work and more than 16,500 CAD
in the infrastructure, maintenance, and development of the network [73].
Conversely, as the distribution of rewards is based on past economic activity, the accumulated
data comprise a public socio-economic profile related to a particular person or organization. There is a
significant amount of power that this type of information can potentially provide if it is appropriated
or centrally controlled. For this reason, as of 2015, Sensorica has been exploring the deployment of the
NRP-CAS infrastructure on the blockchain, to maximize integrity and security [74].
5. Discussion
Sensorica features some unique and admittedly impressive features to speak for a full-fledged
open innovation through CBPP. Its infrastructure and organizational model is, of course, not completely
conflict free, from a technical, conceptual, and a human-centric point of view. However, these do not
reduce the main lessons to be learned from the case.
5.1. On the Viability of the OVN Model
To begin with, the OVN model, as demonstrated by Sensorica, carries some decisive solutions for
commons-oriented projects. The unique modality of production eectuated by CBPP communities
can connect with the market and the public sector by translating, rather than transforming, the value
of the commons in iterative transactions. Financial or other types of rewards can be captured,
Information 2020,11, 104 13 of 18
managed, and distributed to contributors, in a way that is decided among them. Simultaneously,
trust-related issues are dealt with functionally and systematically, while the network is able to
retain community-based values, along a formal legal structure, a marketable brand, and coherent
business strategy.
Sensorica is, quoting one of the interviewees, “a peer-to-peer network for innovation and
production, the same as Bitcoin is a peer-to-peer network for providing a service of exchange”.
The OVN model fundamentally provides a protocol that allows the functional reality of a firm to be
transposed to a peer-to-peer network. People contribute to the economic activity because they trust
the protocol and that they will be rewarded in the end. This opens up a field of experimentation
for dierent ways that people evaluate contributions and distribute benefits. They can try dierent
incentive and evaluation systems to coordinate a variety of contributions and distribute dierent types
of benefits, be it financial rewards, visibility, reputation, learning, or access to governance.
Market signals still serve to attract participation. People engage in a project because they intuitively
believe there is a market for it, but that is less imperative compared to conventional firms. They may
also participate for the social or ecological concerns of a project or the opportunity to learn new skills.
More importantly, they have agency with where the project goes, as people appoint themselves to
one or more roles. “[
. . .
] if anyone comes and solves a problem, delivers a task you cannot refuse it.
And that person can be anyone in the world”, mentioned one of the interviewees. Hence, there are
two dimensions of openness that Sensorica demonstrates: one is access to information, knowledge,
and processes, and the other is access to participation. As another interviewee put it, it “is just the basic
transparency. [ . . . ] People can see everything, so I think that’s what’s helpful with coordination.”
However, this openness and transparency often also comes at a cost. Open systems can sometimes
create disaccord and can obfuscate relationships with third parties, especially when it comes to external
clients. This, of course, goes both ways. The community might be intrinsically motivated to further
explore and experiment, but when market-driven clients are involved this is not always the way they
want to go. Additionally, this can also aect investment, as, besides all the challenges common to
open-source business models, Sensorica also needs to eectively communicate its modus operandi.
As one interviewee eloquently presented it, “you can put it under one roof, but the job security is not
there. [
. . .
] It’s hard to fuse money and protect the community at the same time.” Sensorica tries to
operate within an existing system that is largely not compatible. The structure may be in place but
there is still a big gap to be bridged.
5.2. Breaking the Chains: From Chains to Ecosystems
Overall, Sensorica contributes to a more inclusive discussion on open innovation. Capturing value
from innovations has long been a central topic for the relevant disciplines, to which the concept of open
innovation has hitherto contributed insignificantly. Cases like Sensorica demonstrate how openness
may be an intrinsic and functional, rather than strategic, option. The focus is placed on agency and
stake, instead of structure and control. There is of course structure; someone still needs to make sure all
the necessary roles in a project are fulfilled and that the project delivers. Products need to be introduced
in the market and there is ongoing debate of what is valuable and how funds are distributed. However,
there is at least the discussion taking place and openness allows people to contribute to it. “There are
templates that emerge but we don’t claim to have the recipe and I don’t think there is one recipe,”
mentioned one of the interviewees.
Furthermore, the NRP project has itself evolved through and with Sensorica. Some of the main
instigators of the Sensorica infrastructure admit they are happy to see their work being taken over by
other groups of people, which are now also coming together: “It’s all coming out of the NRP project but
it’s not really the NRP project anymore.” At the time of the interviews, new iterations of the NRP project
were initiated in collaboration with the Freedom Coop (https://ocp.freedomcoop.eu/freedom-coop) in
Europe and The Mutual Aid Network (https://www.mutualaidnetwork.org) in Madison, Wisconsin,
among other communities around the world. The next challenge is to make all of the dierent systems
Information 2020,11, 104 14 of 18
interoperable. As it was righteously put by one interviewee, “because when the software can talk to
each other, then the groups will be able to interoperate with each other. They will be able to exchange
with each other, but more importantly they will be able to create supply chains and, better yet, networks
of ecosystems.”
This vision is particularly relevant to the blockchain domain. The code may be open but
communities gathered around a certain cryptocurrency or protocol can easily get locked in. So, from an
infrastructure viewpoint, a common vocabulary among dierent systems is crucial. Organizations,
firms, or communities can be free to use their preferred software and infrastructure, but systems need
to be interoperable. Much like double-entry bookkeeping provided a common vocabulary for market
exchanges, new forms of accounting can help diverse agents interface with each other. However,
this time there would also be diverse motives driving interaction, other than prices and account
bottom-lines, allowing more pluralistic relationships to emerge.
For instance, the NRP iteration of Freedom Coop, called the Open Collaborative Platform (OCP),
is an organizational tool for network-based organizations. It started as a platform that helped the
Freedom Coop members coordinate and describe, organize, and evaluate the network’s projects and
the collaborative work conducted. The OCP has built on several features of the NRP to expand and
incorporate other projects and functions of the network, including the Bank of the Commons, serving as
an alternative banking tool supported by the network’s cryptocurrency, FairCoin [36,75].
The next steps would be for these emerging forms of organization to build common vocabularies
and protocols to convert and distribute data across dierent networks, tools, and applications. In the
case of the Freedom Coop, the creation of an Open Cooperative Ecosystem [
76
] is aimed at fulfilling
this vision. Moreover, the ValueFlows project is dedicated to the development of a common vocabulary
emerging from the various mutual-coordination networks based on the REA ontology [
77
]. ValueFlows
begins with the definition of the required components that would work across dierent apps and
agents and can be run on dierent decentralized protocols and frameworks, including Holochain,
ActivityPub (https://www.w3.org/TR/activitypub), and Secure Scuttlebutt (https://scuttlebutt.nz).
5.3. Beyond Innovation, towards a Better Life: A Human-Centric Technological Trajectory
Finally, it should be obvious that the whole point of introducing the commons to peer production
is to emphasize that a human economy is still more than interoperating software and integrated supply
chains. As one of the interviewees explained, “[
. . .
] you have to think about the whole lives of the
people involved in it. [
. . .
] They have to be able to eat, they have to be able to have families, they have
to live somewhere, there’s healthcare, there’s the production, there’s also the reproduction, we have
to educate children, there’s this whole set of things that have to happen and it’s not just this supply
chain.” When it comes to being a Sensorica contributor, there is no clear consensus on how the rest of
the factors can fall into place.
The OVN structure makes a lot of sense to someone who lives as a digital nomad, but for someone
who needs to support a family there can be several risks involved. However, as one of the interviewees
put it, “Personally, I think [
. . .
] it’s the only structure that can capture my talents as an individual
and really be able to learn, share and create at the same time, while making an income oof it. It’s
probably the only structure that I’ve ever encountered where I could really thrive as an individual.” So,
despite the various controversies and contradictions, it is still a discussion that needs to be put forward
on institutional level. If anything, open innovation marks a shift in our understanding of the role of
innovation from the view of innovation as a technical and economic process, to the acknowledgement
of the meaningful improvements in people’s lives that can be attained through the deployment of new
technological capabilities.
6. Conclusions
Open innovation signifies a paradigmatic shift in the way innovative activities and the relevant
socio-economic relationships are perceived and carried through. Emerging forms of production,
Information 2020,11, 104 15 of 18
such as commons-based peer production (CBPP), and the accompanying organizational and business
models, unveil dierent ways that diverse agents can establish coherent relationships and collaboration,
based on shared knowledge and resources in open, transparent systems. The main purpose of this
article was to explore such organization forms, along with the technological infrastructures that can
eectuate and stabilize their underlying value models.
The development of blockchain technology has sparked increasing interest from diverse social
groups. Among them, CBPP projects have been looking for ways to deploy blockchains to build
distributed infrastructures able to sustain large-scale open collaboration. Blockchains have opened
up a broad discussion challenging some fundamental assumptions about the function of money and
finance and the way they coordinate value creation. However, blockchain technology alone has been
shown to be inadequate to sustain the multifaceted dynamics of CBPP.
The case of Sensorica was presented as a post-blockchain model that is informed by this discussion
but introduces an alternative techno-social configuration. Predating the surfacing of blockchain
technology by more than two decades, resources–events–agents (REA) is an accounting model
developed to adapt business information systems to the digital age. The unique value accounting
system featured in Sensorica is based on the REA model, allowing loosely-aliated individuals and
groups to engage in open projects, introduce innovative products in the market, and fairly distribute
rewards, according to collectively-agreed rules.
The case of Sensorica demonstrates a tentatively viable economic model consciously developed to
support CBPP. It illustrates a path to harness the innovative dynamics of openness and sharing, but also
the systemic contradictions and structural limitations that come along with them. Its economic model
is still under reconfiguration and the potential evolution is yet to be seen, while broader institutional
arrangements are necessary for it to be fully deployed and replicated.
Nevertheless, a growing community of projects is building further iterations of techno-social
systems inspired by the same principles. A common vision is gradually formed, integrating the
various components and making them interoperable to intensify the exploration of more human-centric
forms of automation. Despite the internal contradictions and structural limitations, reinstating human
wellbeing, societal justice, and visions of the good life in technological projects can be a first step
towards more accountable and meaningful technologies.
Funding:
This research was funded by the European Research Council (ERC) under the European Union’s
Horizon 2020 research and innovation programme (grant agreement No 802512).
Acknowledgments:
I would like to especially thank the people interviewed for the inspiration and time devoted
to discuss and provide feedback on the long process of understanding Sensorica and REA. Furthermore, I owe a
debt of gratitude to my colleagues Chris Giotitsas, Christina Priavolou, and Vasilis Kostakis for their valuable
insights and support in the planning and write up of this paper. All errors remain the author’s sole responsibility.
Conflicts of Interest:
The author declares no conflict of interest. The funders had no role in the design of the
study; in the collection, analyses, or interpretation of data; in the writing of the manuscript, or in the decision to
publish the results.
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©
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... In order for it to be successfully adopted and replicated, it will require support from institutions. Pazaitis A. The number 38 is represented by the numeral [38]. Chatterjee I. [39] emphasises the significance of patents in the contemporary realm of AI, where individuals are free to think innovatively and utilise existing work with slight alterations, which is solely protected by copyright. ...
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The blockchain is an emerging technology that is widely employed in several industries for transactional systems, including logistics in Supply Chain Management (SCM). One of the primary justifications for implementing a blockchain in distribution network management is its ability to lower overall production costs while ensuring the security of the system. However, existing inventory control systems that utilize blockchain technology are vulnerable to cyber-attacks. The objective of this study is to analyses actual risks and deficiencies in system design as a result. Ensuring trustworthiness and security in the supply management system is an essential necessity. This study focuses on the unique problems related to integrity and logistics in Supply Chain Management. The proposal presents a streamlined algorithm that utilizes blockchain technology to guarantee the integrity of data in Supply Chain Management systems enabled by the Internet of Things (IoT). The customized algorithms have been constructed using a private blockchain infrastructure. Topics covered include hash creation, smart contracts, mining, and other consensus algorithms. Proof of work (PoW) and proof of stake (PoS) are efficient methods for executing tasks in a decentralized network of peers. The proposed system was thoroughly examined and confirmed through experimental inquiry. The results were compared with several state-of-the-art methods, demonstrating the efficiency of our technique. This system demonstrates the utilization of blockchain technology to construct an e-transaction system. The concept is evaluated from a practical standpoint, considering both its development and usage contexts. This study serves as a prospective guide for the use of blockchain technology in facilitating intricate applications. The online transaction system allows end users to access and make transactions without the need for third-party validation.
... Inclusive: "Inclusive" means that the blockchain ecosystem is open, accessible, and diverse for both human and nonhuman actors. "Open" signifies open participation [129]. Anyone and any IT artifact should be able to participate in the blockchain ecosystem without needing permission or gatekeepers. ...
Preprint
This paper provides a comprehensive analysis of the challenges and controversies associated with blockchain technology. It identifies technical challenges such as scalability, security, privacy, and interoperability, as well as business and adoption challenges, and the social, economic, ethical, and environmental controversies present in current blockchain systems. We argue that responsible blockchain development is key to overcoming these challenges and achieving mass adoption. This paper defines Responsible Blockchain and introduces the STEADI principles (sustainable, transparent, ethical, adaptive, decentralized, and inclusive) for responsible blockchain development. Additionally, it presents the Actor-Network Theory-based Responsible Development Methodology (ANT-RDM) for blockchains, which includes the steps of problematization, interessement, enrollment, and mobilization.
... Inclusive: "Inclusive" means that the blockchain ecosystem is open, accessible, and diverse for both human and nonhuman actors. "Open" signifies open participation [129]. Anyone and any IT artifact should be able to participate in the blockchain ecosystem without needing permission or gatekeepers. ...
Book
Responsible Blockchain provides a comprehensive analysis of the challenges and controversies associated with blockchain technology. It identifies technical challenges such as scalability, security, privacy, and interoperability, as well as business and adoption challenges, and the social, economic, ethical, and environmental controversies present in current blockchain systems. The authors argue that responsible blockchain development is key to overcoming these challenges and achieving mass adoption. This monograph defines Responsible Blockchain and introduces the STEADI principles (sustainable, transparent, ethical, adaptive, decentralized, and inclusive) for responsible blockchain development. Additionally, it presents the Actor-Network Theory-based Responsible Development Methodology (ANT-RDM) for blockchains, which includes the steps of problematization, interessement, enrollment, and mobilization.
... In summary, there are indications that the financial services industry has access to external expertise to supplement internal knowledge and is engaged in learning to build up capabilities. To fast track the internal knowledge transfer and increase learning there are other options to look outside the industry to acquire expertise from other industries that have already adopted the technology that have already adopted the technology (Pazaitis, 2020). ...
Technical Report
Full-text available
Open innovation is a common practice among nearly 80% of large firms, yet the exploration of innovation within financial services remains limited in existing literature. Similarly, while the potential benefits of innovative distributed ledger technology (DLT) are widely recognized, its adoption within the financial services industry has been sluggish. This systematic literature review aims to examine whether financial services firms engage in open innovation, particularly focusing on outside-in innovation over inside-out innovation, and to uncover potential barriers to DLT adoption at the industry level. Drawing from peer-reviewed journals between 2017 and 2022, the review synthesizes findings to address key questions. Specifically, it investigates why inside-out open innovation is less practiced and understood, whether financial institutions possess the willingness to change their business and service models, why they may not engage in inside-out open innovation, and their proficiency in DLT. Our analysis identifies various factors contributing to the limited uptake of open innovation in financial services, including a preference for closed innovation and outside-in open innovation, organizational conservatism, trust issues within the ecosystem, conflicting priorities, timing constraints, and the perceived threat to existing business models posed by DLT innovation. In conclusion, while open innovation has garnered academic attention and industry practice, there remains a gap in the literature regarding methodologies and standards, which could serve as a framework for practitioners. This paper emphasizes the need for further research to understand current practices, successes, incentives, failures, and abandonment rates in open innovation, ultimately facilitating the development of best practices standards.
... Open innovation has jumped out of the growing world of "much bigger and much higher" prospects, which includes the domain of carry-outs conceptions, thoughts and philosophies around the allotment of knowledge and conceptions fundamentally executed by the info and communication technological domain (Pazaitis, 2020). The principal agenda and rationality are associated with the solution of problematic prospects, developing a previously unnoticed capability concerning massive scale arrangement, and synchronization of various participants (Benkler, 2017). ...
Book
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Chapter 2 focuses on understanding the relevance of the antecedents of supply chain collaboration in the era of BCT and highlights the opportunities and challenges for BCT implementation in SC networks. It reviews some of the critical antecedents of SCC considering the BCT implementation and explains how SC partners may leverage these technologies to enhance the network’s collaborative advantage. It contributes to the domain of SCC by extending the perception of underlying constructs of SCC when viewed in conjunction with the BCSCM and motivating the researchers to reconsider the idea of SCC to benefit the SC partners in the network. Chapter 3 builds on the argument that scholastic literature is ambiguous on the impacts of BCT on SC resilience directly and through other essential strategies like SC mapping. The chapter explores blockchain-driven supply chain’s influence on supply chain resilience. It operationalizes supply chain resilience as the constituent of 3Rs (Readiness, Response, and Recovery) and suggests a framework linking blockchain-driven supply chain with these three cords of supply chain resilience. The chapter can help understand the innate complexities associated with BCSCM and SC resilience. Another facet of resilience has been explained in the later part of the book in Chap. 14, with a special focus on the role of a firm’s intellectual capital in capitalizing BCSCM for Supply Chain Resilience. This chapter can help reader understand the role of the human in the supply chain. One of the long-standing issues firms are dealing with is inventory visibility and management. Despite significant development in supply chain management technologies, many aspects of inventory management are yet to be resolved. In this regard, Chap. 4 of this book explains the instrumentality of blockchain technology in managing the supply chain. A brief discussion on the role of blockchain in inventory management has been given in the chapter, followed by recent developments in the field. Adopting blockchain in supply chain management is a challenging task that greatly depends upon the employees in the organization. To make the employees ready to accept the change, leaders have to adopt transformational leadership. Using leadership, organizations can provide the vision to employees to pursue the adoption of blockchain technology. Additionally, through leadership, organizations can address individual roadblocks hampering the adoption of blockchain. Chapters 5 and 6 have been allocated to explore the role of leadership in blockchain adoption. Chapter 5 deals with the transformational leadership-blockchain adoption paradox and explain what could be the most viable leadership style for blockchain adoption. Whereas Chap. 6 reviews the extant literature on the linkages among leadership, blockchain, and supply chain management. This chapter explains how businesses may successfully introduce and integrate blockchain technology into the management of their supply networks through the role of leadership. As mentioned earlier, traceability has been a core issue supply chains are dealing with. Be it the horse-meat scandal or the COVID-led disruptions, the visibility has always been an issue if the supply chain managers. In this regard, Chap. 7 undertakes a thorough discussion on supply chain traceability with a special focus on the food sector and highlights some of the loopholes in existing technologies, which can be overcome by BCT. The chapter can be a wonderful read for those interested in the application of blockchain for SC traceability. Firms heavily rely on their supply chains for innovation especially open innovation. Chapters 8 and 9 of the book have been dedicated to explaining the diverse role of BCSCM in open innovation. The former (Chap. 8) offers a Supply Chain Open Innovation Networks (SCOINET) framework backed by blockchain. SCOINET can help guide policymakers to develop open innovation networks for the supply chain and other functions. The later (Chap. 9) explores the linkage of BCSCM with the open innovation. Despite an increasing focus on supply chain resilience, sustainability has not lost its importance. We can see increasing pressure on firms from outside and inside sources to have more responsible and sustainable supply chains. Keeping in view the significance of the topic, three interrelated chapters (Chaps. 10–12) explore the various role of BCSCM in sustainability. Chapter 10 of the book examines the role that a blockchain-driven supply chain can play in improving firm sustainability. The conclusive argument of the chapter is that blockchain can be instrumental in making a firm more sustainable. Chapter 11 focuses on the Role of Blockchain Technology Adoption between Sustainability-Related Supply Chain Risks and Triple Bottom Line Performance. Whereas Chap. 12 proposes a framework illustrating the role of Intellectual Capital in Implementing Blockchain Technology-driven Sustainable Supply Chain. Chapter 13 has been dedicated to explaining blockchain technologies’ position and role in Industry 4.0. It provides an overview of Industry 4.0 and related technologies. The chapter also highlights obstacles that may give rise to future areas of study in B.Sc. and I4.0. Last two chapters of the book take a diverse approach. Chapter 15 critically reviews the marketing, supply chain management, and blockchain literature and explains the benefit from a blockchain-driven supply chain. The chapter also discusses the application of blockchain technology in marketing and the way it could disrupt the marketing mix and processes. This chapter could be useful in understating the role of a blockchain-driven supply chain in forecasting customer demands, enhancing the traceability and transparency of transactions, improving customer trust, and reduce transaction risks. The last chapter takes a macro approach and explains the linkage of Blockchain-Based Digital Economy and Industry 4.0. xii Introduction Before concluding, it is important to highlight the two aspects of the blockchaindriven supply chain that must be explored. First is Interoperability across BCSC networks, which refers to the ability to trade, review, and access data across many blockchain networks without the involvement of a mediator. Secondly, the challenges, the grey or dark side of the blockchain, from the perspective of capitalizing on the true strength of the technology.
... Open innovation has jumped out of the growing world of "much bigger and much higher" prospects, which includes the domain of carry-outs conceptions, thoughts and philosophies around the allotment of knowledge and conceptions fundamentally executed by the info and communication technological domain (Pazaitis, 2020). The principal agenda and rationality are associated with the solution of problematic prospects, developing a previously unnoticed capability concerning massive scale arrangement, and synchronization of various participants (Benkler, 2017). ...
Chapter
This chapter aims to demonstrate how implementation of blockchain-driven supply chain can improve traceability in the food supply. The five cases included in this chapter, three from a South Asian country and two from Europe, elaborate chapter’s central argument. Even though the supply in European countries is well regulated and documented but still faces legal issues like counterfeit products and undisclosed product ingredients. The situation is worst in South Asian countries, where traceability of information from the point of origin to the selling point is even more difficult. Such non-traceability results in ethical and legal issues, other than customer trust issues. Authors suggest that block chain-driven-supply chain could be the ultimate solution to traceability issues in the food supply chain. Information processing theory operates at the backend to support the notion of traceability. Finally, a food supply chain model via blockchain technology is proposed to handle the issue of traceability.
... Open innovation has jumped out of the growing world of "much bigger and much higher" prospects, which includes the domain of carry-outs conceptions, thoughts and philosophies around the allotment of knowledge and conceptions fundamentally executed by the info and communication technological domain (Pazaitis, 2020). The principal agenda and rationality are associated with the solution of problematic prospects, developing a previously unnoticed 6 capability concerning massive scale arrangement, and synchronization of various participants (Benkler, 2017). ...
Chapter
Advanced networking systems among consumers, goods, and value imposing major challenges for industries. Which comprises a change in consumers’ outlooks and forces on producing low-cost merchandise, arrangement, and supply chain. These changes demand advancements concerning businesses to adapt to modern system by encouraging and embracing advanced and innovative solutions for the challenges. Which highlights the overall modification of industries which is described as ‘industries 4.0′, which enforces the need for digital technologies, networking in industries, and associated practices. The blockchain technological domain is strongly incorporated by industries over the years. The usefulness of blockchain is not only accepted for the monetary sector but at the same time proven highly effective for supply chain management as well. Blockchain is an advanced technological domain that refines overall efficacy, transparency, and unambiguity. Currently, logistics and supply change are highly persuaded by the innovativeness, latest technological aspects, change in processes, and competitively that enhance challenges, which demands change and applying technological aspects for the modern supply chain as a multilevel system.
... Open innovation has jumped out of the growing world of "much bigger and much higher" prospects, which includes the domain of carry-outs conceptions, thoughts and philosophies around the allotment of knowledge and conceptions fundamentally executed by the info and communication technological domain (Pazaitis, 2020). The principal agenda and rationality are associated with the solution of problematic prospects, developing a previously unnoticed capability concerning massive scale arrangement, and synchronization of various participants (Benkler, 2017). ...
Chapter
The emerging trends in blockchain-driven supply chain management (BCSCM) have gained popularity among practitioners in recent years. The growing scholarly interest in this discipline has unveiled various supply chain management practices; however, there is an implicit gap concerning exploring the role of contextual factors that influence the blockchain-driven supply chain. The current chapter contributes to the literature by investigating the impact of leadership on blockchain that would radically improve supply chain management. In this chapter, we review the extant literature on the linkages among leadership, blockchain, and supply chain management. Over and above, the main objective is to understand the mechanism that how businesses may successfully introduce and integrate blockchain technology into the management of their supply networks through the role of leadership.KeywordsLeadershipBlockchainSupply chainBlockchain-driven supply chain
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This meta-analysis fills a crucial research gap by examining how Open Innovation Networks (OINs) and Digital Transformation (DT) synergize to improve Enterprise Innovation Capabilities. This study examines EIC kinds, moderating factors, and environmental variables to explain this synergy. The analysis comprised 2016–2023 English articles. Twenty trials with 10,234 people found that OINs and DT synergize. Combining components boosts radical innovation and new product creation more than their individual benefits. Competitive and challenging firms benefit most from OINs and DT synergy. These findings suggest firms should intentionally mix OINs and DT and promote exploratory innovation skills to increase EICs. Weaknesses include the study's limited sample size, lack of industry and geographical variety, and lack of OIN and DT mediation on EICs. These findings should be replicated, methods investigated, and OINs and DT's effects on significant EIC features compared globally. Future research should address these constraints to better understand OIN-DT synergy on EICs. Stats must be explained with numbers and effect sizes. To comprehend the study's scope and consequences, characterize the sample size, geographical focus, and lack of mediating mechanism exploration. The abstract should include "innovation networks", "digital transformation", and "enterprise capabilities" to improve discoverability and efficacy.
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This work provides a systematic literature review of blockchain-based applications across multiple domains. The aim is to investigate the current state of blockchain technology and its applications and to highlight how specific characteristics of this disruptive technology can revolutionise "business-as-usual" practices. To this end, the theoretical underpinnings of numerous research papers published in high ranked scientific journals during the last decade, along with several reports from grey literature as a means of streamlining our assessment and capturing the continuously expanding blockchain domain, are included in this review. Based on a structured, systematic review and thematic content analysis of the discovered literature, we present a comprehensive classification of blockchain-enabled applications across diverse sectors such as supply chain, business, healthcare, IoT, privacy, and data management, and we establish key themes, trends and emerging areas for research. We also point to the shortcomings identified in the relevant literature, particularly limitations the blockchain technology presents and how these limitations spawn across different sectors and industries. Building on these findings, we identify various research gaps and future exploratory directions that are anticipated to be of significant value both for academics and practitioners.
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Blockchain is an emergent technology concept that enables the decentralized and immutable storage of verified data. Over the last few years, it has increasingly attracted the attention of different industries. Especially in Fintech, Blockchain is hyped as the silver bullet that might overthrow today's payment handling. Slowly, the logistics and supply chain management community realizes how profoundly Blockchain could affect their industry. To shed light on this emerging field, we conducted an online survey and asked logistics professionals for their opinion on use case exemplars, barriers, facilitators, and the general prospects of Blockchain in logistics and supply chain management. We found most of our participants are fairly positive about this new technology and the benefits it offers. However, factors like the hierarchical level, Blockchain experiences, and the industry sector have a significant impact on the participants' evaluation. We reason that the benefits over existing IT solutions must be carved out more carefully and use cases must be further explored to get a rather conservative industry, like logistics, more excited about Blockchain.
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This book integrates new theory and research findings into the framework of a “free innovation paradigm.” Free innovation, as the book defines it, involves innovations developed by consumers who are self-rewarded for their efforts, and who give their designs away “for free.” It is an inherently simple grassroots innovation process, unencumbered by compensated transactions and intellectual property rights. Free innovation is already widespread in national economies and is steadily increasing in both scale and scope. Today, tens of millions of consumers are collectively spending tens of billions of dollars annually on innovation development. However, because free innovations are developed during consumers' unpaid, discretionary time and are given away rather than sold, their collective impact and value have until very recently been hidden from view. This has caused researchers, governments, and firms to focus too much on the Schumpeterian idea of innovation as a producer-dominated activity. Free innovation has both advantages and drawbacks. Because free innovators are self-rewarded by such factors as personal utility, learning, and fun, they often pioneer new areas before producers see commercial potential. At the same time, because they give away their innovations, free innovators generally have very little incentive to invest in diffusing what they create, which reduces the social value of their efforts. The best solution, this book argues, is a division of labor between free innovators and producers, enabling each to do what they do best. The result will be both increased producer profits and increased social welfare—a gain for all.
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We present a large-sample survey of open innovation adoption and management in large firms, a follow-up to a previous study. We repeat some of the survey measures from the first survey, finding that open innovation continues to be widely practiced in about 80 percent of responding firms. Outside-in open innovation is more often practiced than inside-out. In other words, large firms are net takers of free knowledge flows, in part because they are concerned about IP protection for outbound knowledge. When we added new measures to examine open innovation at the project level, we found that firms selectively manage knowledge flows into and out of projects and are formalizing processes as they move from problem definition to execution. We conclude with observations about the organizational challenges and risks of shifting to an open innovation approach.
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This article explores the potential of blockchain technology in enabling a new system of value that will better support the dynamics of social sharing. Our study begins with a discussion of the evolution of value perceptions in the history of economic thought. Starting with a view on value as a coordination mechanism that defines meaningful action within a certain context, we associate the price system with the establishment of capitalism and the industrial economy. We then discuss its relevance to the information economy, exhibited as the techno-economic context of the sharing economy, and identify new modalities of value creation that better reflect the social relations of sharing. Through the illustrative case of Backfeed, a new system of value is envisioned, comprising three layers: (a) production of value; (b) record of value; and (c) actualisation of value. In this framework, we discuss the solutions featured by Backfeed and describe a conceptual economic model of blockchain-based decentralised cooperation. We conclude with a tentative scenario for blockchain technology that can enable the creation of commons-oriented ecosystems in a sharing economy.