BUSHOR-1123; No. of Pages 10 Open innovation requires integrated competition-community ecosystems: Lessons learned from civic open innovation Esteve Almirall a,1 , Melissa Lee a,1 , Ann Majchrzak a,b,1, * a ESADE Business School, Avda. Torre Blanca, 59, Sant Cugat del Valles, 08172, Spain b Marshall School of Business, University of Southern California, 3670 Trousdale Parkway, Los Angeles, CA 90089, U.S.A. 1. Open innovation: Competitive markets and collaborative communities Open innovation has been defined as a strategy that uses ‘‘purposeful inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for the external use of innovation, respec- tively’’ (Chesbrough, 2003, p. 1). This strategy has been proposed as a way to develop innovative products beyond the internal capacity of the Business Horizons (2014) xxx, xxx—xxx Available online at www.sciencedirect.com ScienceDirect www.elsevier.com/locate/bushor KEYWORDS Open innovation; Transforming government; Ecosystems; Public sector effectiveness; Best management practices; Hackathon; Crowdsourcing Abstract Open innovation has received substantial business attention as a means of providing firms in hyper-competitive environments with the ability to create a stream of new products and services. For open innovation, organizing external sources correctly is a critical capability; current literature suggests that external sources should be organized either as collaborative communities or as competitive markets. While firms have generally been slow to adopt open innovation, many cities in the U.S. and Europe have been quick to embrace it–—providing needed field-based experience on how to organize external sources. Based on our examination of six cities opening their data for innovation, we found that while cities often started with one or the other approach to organizing their external sources, each approach was inadequate in ways that could potentially be addressed by the addition of the other approach. Thus, we conclude with an integrated approach in which the needs of the entire ecosystem of sources and supporters of innovation are organized to address both competitive and community needs. # 2014 Kelley School of Business, Indiana University. Published by Elsevier Inc. All rights reserved. * Corresponding author E-mail addresses: esteve.almirall@esade.edu (E. Almirall), melissajo.lee@esade.edu (M. Lee), majchrza@usc.edu (A. Majchrzak) 1 Listed alphabetically; all authors contributed equally to this work. 0007-6813/$ — see front matter # 2014 Kelley School of Business, Indiana University. Published by Elsevier Inc. All rights reserved. http://dx.doi.org/10.1016/j.bushor.2013.12.009