This thesis deals with two aspects of knowledge needed for new product development; theaccess to external knowledge through outsourcing of NPD and the integration of knowledgedeveloped when outsourcing activities in the NPD process. As modern products competing onincreasingly international markets call for both complex and specialized knowledge, it isbecoming more important to take an outward perspective of knowledge, searching for externalknowledge sources, in order to be competitive. But it is also important for the firm to take aninward perspective on integration of the knowledge achieved from external sources in order tosecure the knowledge gained.

Outsourcing of New Product Development (NPD) refers to the outsourcing of activities fordeveloping new products (goods and/or service), where all or the innovative part of the NPDprocess is purchased externally according to a contract from organizational units separatefrom the outsourcing firm. This means that the service to develop a whole or a part of a newproduct is outsourced. This definition implies that (A) the outsourced activity shall be aninnovative (strongly contributing to the newness) part of the NPD process, (B) the outsourcedactivity was previously conducted internally, and (C) the activity shall be purchased andregulated in a contractual agreement between the organizations.

Knowledge integration refers to the process of acquiring, sharing, and making use ofknowledge by combining it with previous knowledge in order to create new value. Becauseknowledge possessed in collaborating firms is often complementary, it is important tocombine it with previous knowledge in the firm. Therefore knowledge integration is chosenthroughout the thesis as the term for the overall process.

Based on transaction costs theory, resource based and knowledge based perspectives twomajor issues are investigated. First, the identification of which factors are the most importantfor firms when making the decision to outsource activities in the NPD process. Second, theestablishment of the importance for knowledge integration of external knowledge in the firm,and to find what role level of involvement among staff plays for efficiently achievingknowledge integration.

The thesis is a compilation thesis (with six appended papers) based on findings from threequantitative studies and a longitudinal case study (presented in two of the appended papers).Using cases from and samples of medium-sized manufacturing firms with in-house NPD itwas found that, while cost has been traditionally considered the most important factor foroutsourcing in general, search for external knowledge is found to have a greater importancewhen intangible processes as NPD is object for outsourcing. It is also found that thematicknowledge is the most important type of knowledge to efficiently integrate to achieve highinnovation performance and that a higher degree of processes and culture supportinginvolvement, increase knowledge integration when outsourcing activities in the NPD process.