Construction of Open Innovation Ecology on the Internet: A Case Study of Xiaomi (China) Using Institutional Logic

The characteristics of collaborative innovation and interactions among core enterprises, users, and partners are critical. Research is lacking on how to construct open innovation ecology through institutional design. This study explores how core enterprises effectively motivate users and partners to participate in innovation activities on the Internet and successfully constructing open innovation ecology, using the institutional logic theory and an exploratory case study of Xiaomi, a famous Chinese Internet enterprise. The findings are as follows: (1) three main characteristics of innovation carried out by core enterprises, users, and partners in the open innovation ecology—iterative innovation, social innovation, and joint innovation; (2) three new institutional practices—following, leading, and symbiotic mechanisms—which provide an effective institutional guarantee for interaction and innovation; (3) two kinds of institutional logic—administrative logic and social logic, which core enterprises follow to construct open innovation ecology on the Internet, and its change in innovation characteristics. Therefore, a full understanding of the changing rules of the institutional logic is fundamental for successfully building open innovation ecology. This study enriches both the open innovation ecology theory as well as the institutional logic theory. In addition, Xiaomi’s open innovation ecological development model proves that core enterprises can take the approach of building open innovation ecology. It provides a strong example to other enterprises on innovations on the Internet.