Behavioral Economics
Prof. Dr. Friedel Bolle
Gruppe 3: Biedulska, Monika; Kotter, Angela ; Ziemann, Angelique
Not Invented Here Syndrome (NIH)
The Not Invented Here Syndromeis a social phenomenon that describes the unwillingness of adopting an idea or a product because of its origin. In this context already existing technologies, knowledge or solutions are avoided/ignored by a persistent social, corporate or institutional culture. The term comes along with the general thinking that if those improvements (achieved by others)were worthwhile, we(ourselves) would have already thought of them. Thus, if it is “not invented here”, it is not good respectively sufficient.
Based on this definition, the following characteristics of the NIH bias – a symptom of group thinking - can be deduced: In general,own ideas are valued higher and are more appreciated than those of others. Accordingly, other sources than one’s ownare seen as hostile or inferior. This often leads to a dismissive and pejorative attitude towards other ideas, solutions and technologies which is not least the reason why the NIH bias is regarded as a form of nationalism.
Taking into account the characteristics mentioned above, positive aspects of thisphenomenon can be seen for example in the defense against aggressive actions by other companies. Furthermore, NIH can be considered as animportant protective mechanism for internal processes and as a support of the development of a company’s capacity and innovative ideas.
Nevertheless, the NIH bias possesses some negative consequences as well: Already existing technologies or products are ignored, even if they are of a better quality or represent the better solution. As NIHcauses a huge preference for a company’s own ideas, everything has to be developed by oneself, which can lead to time lags and/or high costs.
In the light of globalization and a wide range of innovative ideas, the NIH phenomenon should be reconsidered. Academics such as Henry Chesbrough (Harvard Business School Professor) call for a massive cultural change supporting the concept of cooperation between leading partners and of open innovation. In this context, some critics of the NIH bias advocate the idea of Proudly Found Elsewhere (PFE).
Finally, a balanced mixture of both – NIH and PFE – may be a recommendable approach for international companies.
Example for the NIH bias: The low acceptance of early British-made home computers in Japan and Japanese-made ones in Britain and the USA.
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