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Abstract: Previous research have opposed secrecy and openness as mutually exclusive processes. In this paper, we suggest a more nuanced approach to secrecy in open innovation, drawing from Philosophy and Sociology. We have conducted a two-year research program in the defense industry, collecting data on the practices of concealment in open innovation activities. We found that focal actors utilize distinct cognitive techniques to decontextualize knowledge in the course of open innovation projects in order to safeguard secrecy while preserving mutual learning. Further, focal actors design contrasted relational approaches to secrecy with their open innovation partners. Such approaches are based on the positions of secrecy boundaries, which are internal or external to the relationship. In fact, actors intentionally make use of the reversible nature of secrecy, balancing inclusion and exclusion of knowledge in partnerships, to meet objectives that sometimes go beyond knowledge protection. Finally, we build on our findings to introduce a capability-based framework of secrecy management in openness processes. This framework, which we call Knowledge Discretion, suggests that actors overcome tensions stemming from secrecy and openness playing on the contextual depth and relational breadth of external knowledge sharing.

Keywords: Secrecy; innovation

JEL-codes: O30

35 pages, November 4, 2020

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