Using Absorptive Capacity to Optimize Value Creation from University-Industry Partnerships: Companies can use absorptive capacity to achieve their desired value in university-industry partnerships and ensure resources focus on creating meaningful products and services, rather than simply creating knowledge.

Overview: University-industry partnerships are collaborations in which companies and public institutions innovate together. By bundling expertise and sharing costs, university-industry partnerships can be an attractive innovation option for companies. However, a firm needs absorptive capacity to effectively use outcomes. To improve innovation performance in practice and contribute to theory, this article explores how companies can increase value derived from university-industry partnerships by increasing its absorptive capacity. We used a qualitative, multiple case study approach to study selected university-industry partnerships at Royal DSM—a multinational corporation active in health, nutrition, and bioscience. These cases revealed three main vulnerabilities to absorptive capacity for DSM: high reliance on single managers to run university-industry partnerships, limited formulation of desired value from them, and insufficient resource dedication to transform their outcomes into valuable products. We offer specific managerial recommendations to increase the effectiveness of university-industry partnerships.