A New Concept of R&D in NEO Open Innovation : Transformation of R&D Triggered By Amazon

Abstract

Amazon was the world’s top R&D firm in 2017. Its R&D investment was double that of 2015, quintuple that of 2012, and tenfold that of 2011. It deploys a unique R&D model as conducting “routine or periodic alternations” and “significant improvement” simultaneously. Since traditionally the former is classified as non-R&D, Amazon’s rapid and notable increase has raised the question of a new R&D definition in the digital economy. By means of an empirical analysis of the Amazon’s R&D model, this paper attempted to provide a convincing answer to this question. Amazon has invested considerable resources in extremely innovative business areas, which has developed its assimilation capacity. In parallel with such forefront innovation, Amazon is endeavoring to absorb soft innovation resources from external markets and assimilate them into its business model. This then transforms “routine or periodic alternations” into “significant improvement”, leading to the company becoming the world’s top R&D firm. Such an endeavor has triggered a new concept of R&D in neo open innovation and revealed the significance of a transformation of the R&D concept in the digital economy.