OPEN INNOVATION WITHOUT ABSORPTIVE CAPACITY: WHY INDIVIDUAL EXTERNAL ENGAGEMENT FAILS TO BECOME INSTITUTIONAL LEARNING IN TRANSITION-ECONOMY HIGHER EDUCATION

Abstract

Open Innovation theory holds that organisations improve performance by purposively managing knowledge flows across their boundaries. Yet the value of external engagement depends on absorptive capacity — the institutional ability to recognise, assimilate, and apply external knowledge. This paper examines the gap between potential and realised absorptive capacity in a transition-economy higher education institution. Using survey data from staff of the Tashkent Institute of Management and Economics (TIME) in Uzbekistan (n = 50), the study finds that Open Innovation operates predominantly as an informal, individual-level phenomenon: while staff are encouraged to engage with external networks (mean = 3.14 on a five-point scale), the institution fails to capture that knowledge internally (mean = 2.24) and does not benchmark systematically against peers (mean = 2.14). This 0.90-point gap between encouraged individual engagement and realised institutional capture represents a structural failure of absorptive capacity. A pilot intervention demonstrated that targeted, low-cost mechanisms can begin to close this gap, raising the aggregate Open Innovation index by 21.2%. The paper argues that, in transition economies, the binding constraint on Open Innovation is not awareness or willingness but the absence of institutional infrastructure to convert individual exposure into organisational learning. Implications for institutional strategy and higher-education policy are discussed.