Outsourcing of NPD activities: a best practice approach

Purpose – The purpose of this paper is to improve the understanding of outsourcing new product development (NPD), and specifically of factors affecting the outsourcing decisions, by exploring the practices of the most innovative firms. Design/methodology/approach – The paper draws on an internet‐based survey sent in winter 2008 to 494 medium‐sized firms in four industries which achieved a 77.3 percent response rate. The sample is split into the best firms and the rest, and a best practice analysis is performed with correlation analysis. Findings – The best firms focus on knowledge issues to a higher extent, while cost and geographical proximity are more important for the rest firms. The best firms prioritize knowledge integration and development of knowledge about the outsourcing process higher. Research limitations/implications – The sample is taken from medium‐sized Swedish manufacturing firms. Future samples need to be expanded to further generalize the conclusions. Results show that further research combining resource and cost perspectives is needed. Practical implications – Managers are recommended to not only find access to needed knowledge, but also give time to integration on a personal level, as this protects knowledge and lowers costs in the long‐run. Originality/value – Studies of outsourcing NPD are few and, to the authors’ knowledge, no quantitative studies on the topic have been made.