Measuring Open Innovation in SMEs

At present, open innovation (OI) practices have gained traction in all industries, particularly in small and medium-sized enterprises (SMEs). However, only a few Malaysian SMEs practice OI and there is limited literature available on OI practices in Malaysian SMEs. To address this issue, the main objective of the current study is to reveal the challenges of OI and the role of financial constraints in Malaysian SMEs. To achieve this objective, this study implemented the quantitative approach and adopted the cross-sectional research design. Questionnaires were used to collect data from three hundred (300) data managerial staff of Malaysian SMEs. Cluster sampling was used to collect the data. It was found that Malaysian SMEs faced various challenges during the implementation of the OI system. These challenges included motivating spillovers, maximizing internal innovation, and incorporation of external knowledge and intellectual property (IP) management. Moreover, it was found that sufficient finance is needed to resolve these challenges. Hence, this study contributes in the body of knowledge by developing a framework for SMEs to facilitate OI and by identifying the constraints in this framework. Therefore, the current study can be used for Malaysian SMEs to improve their OI system.

The objective of this study is to examine the role of open innovation practices to promote globalization. For this purpose, this study considered two open innovation practices: external knowledge and supplier involvement. A survey was carried out to collect primary data from the respondents. This study preferred Chinese small and medium-sized enterprises (SMEs) to examine the role of open innovation in globalization. Data were collected from the employees of SMEs in China. By employing Structural Equation Modeling, this study addressed the important insights for academicians and practitioners. It is concluded that; open innovation practices have key role to promote globalization. The promotion of open innovation practices among the Chinese SMEs can increase the globalization potential. The strategies of open innovation led to increase in business collaboration across the border business organizations. The business collaboration between the SMEs of various countries is the best way to enhance globalization by increasing the level of social capital. Therefore, those institutions who want to promote globalization should promote open innovation practices among the business organizations.

This exploratory study addresses a gap in management literature by addressing the role of location in the continuously expanding field of open innovation research. In this context, we analyze potential negative effects of absolute geography and relative proximity on open innovation practices in high-tech small and medium-sized enterprises (SMEs) in the United Kingdom. Drawing upon cluster theory and business ecosystem literature, the analysis from three SME case studies in the East of England suggests that presumed ‘favorable’ location variables, such as close relative proximity between partners and the presence of economic clusters, can have certain negative effects on open innovation practices.

Knowledge exchange is a prerequisite for learning and consequently for innovation. Through open innovation, the innovating firms establish ties with other organizations, in order to innovate. At the baseline, open innovation is thus the exchange of knowledge through in- and out-flows of the knowledge at a company. Formal networks can provide access to other organizations and otherwise unavailable knowledge and resources and are seen as the locus of innovation. Four main categories of knowledge exchange can be distinguished: socialization, combination, articulation, and internalization. Within these categories, distinct but interdependent processes of knowledge exchange take place as described in the innovation production process (IPP) which consists of three main steps, knowledge accumulation, knowledge transformation, and knowledge exploitation (Roper et al., 2008). The objective of this paper is to explore how formal networks contribute to the categories of knowledge exchange and to each of the three steps of the IPP in order to conclude on how networks can facilitate open innovation among their members. Data are collected by means of three case-studies conducted in three Flemish formal networks which focus on enhancing the innovativeness and learning capabilities of micro, small and medium sized enterprises (SMEs). Our findings confirm the importance of networks in the process of knowledge exchange and innovation for SMEs in the food sector. The most important role of the networks is to create the appropriate environment according to the type of knowledge and the step(s) in the innovation production process focused on. Furthermore, it appears to be a very important task of the network to stimulate actively knowledge transformation into innovation outputs such as new or improved technology or product prototypes. Thereby, not only short-term effects should be aimed at, but also long-term effects e.g. for organizational innovation, should be taken into account. In conclusion, all three networks follow very different approaches in order to facilitate, stimulate and support knowledge exchange and innovation among their members. Based on the results, managerial as well as policy implications are posed towards network members, i.e. the SMEs, network coordinators and researchers.

Opening the innovation process represents a new opportunity for small, medium and large firms to increase the internal innovative capacity and to raise their overall innovation performance. Although large firms still realised the higher amount of innovation, few studies have paid attention to open innovation (OI) in small and medium sized enterprises (SMEs) and how the use of OI practices in SMEs differ from large enterprises. Starting from the findings in Spithoven (2013) that SMEs can foster the introduction of new offerings through collaboration with several innovation partners and that collaboration with partners increases the likelihood that SMEs launch new products and services, we investigate through a web-based survey realised in Italy how organisational factors, strategic factors and environmental factors impact on the ability of a firm to adopt an OI approach, if size matters, and whether innovation intermediaries play a critical role in the opening process.

PurposeThis study examines how technology-intensive small- and medium-sized enterprises (SMEs) engage in open innovation. The purpose of this paper is to add to the literature on open innovation in SMEs, which has received considerably less attention than open innovation in large companies. Also, the study adds on the literature on open innovation in the commercialization phase.Design/methodology/approachA multiple case study of 13 technology-intensive SMEs in forestry sector was conducted. The forestry sector in Finland was chosen as a target context, there were many innovative pioneering SMEs operating in the industry and because the sector was going through significant changes.FindingsThree multi-firm collaboration modes in the commercialization phase were identified: networks with a lead partner, equal partnership, and partnership for external technology commercialization. The study shows that in SMEs, open innovation is used for commercialization rather than research and development. The main conclusion of the study is that the mode of collaboration in commercialization is determined by the core competence of the firm and the strategy for open innovation.Practical implicationsThe study results imply that SMEs benefit from opening up their innovation process in the commercialization phase. The firms in this study employed a blend of strategies that capitalized on their internal strengths. They collaborated actively with external firms and outsourced from specialists. This way they were able to compensate for their internal weaknesses and gain competitive advantage.Originality/valueThe study extends our understanding of open innovation by providing a detailed analysis of how open innovation takes place in the commercialization phase of innovation process. Also, the study extends understanding of the strategic use of open innovation in SMEs by showing how SMEs balance the risk of losing their competitive advantage built on innovation and the benefit of creating a broader competence base with partnerships.

PurposeDespite the importance of top management team (TMT) gender diversity in a firm's strategic decisions and the high degree of innovation activities that several firms have experienced in recent years, little or no research has examined how TMT gender diversity affects a firm's open innovation decision. The authors examine how TMT gender diversity impacts firms' open innovation activities. The authors further examine how this impact is affected by women executives' personal attributes and institutional conditions.Design/methodology/approachThe sample comprised of 62,745 firm-year observations (9,831 firms) from 25 countries from 1990 to 2010. The authors employed the system generalized method of moments (GMM) estimation technique to estimate the results.FindingsEmploying novel panel data on co-owned patents across 25 economies, the authors find that proportion of women in TMTs has a positive impact on open innovation activities. Moreover, the authors find that women managers' power and institutional gender parity strengthen the association between gender diversity and open innovation.Practical implicationsThe findings of this study indicate that firms committed to optimizing their open innovation policies and practices should include women in TMTs and create such conditions that are supportive for women executives to effectively express their innate inclinations. Importantly, our study supports the business case for gender diversity in top leadership positions by providing a compelling evidence for the positive impact of TMT gender diversity on open innovation.Originality/valueThis study contributes to the gender diversity literature by showing how women leaders' values and character become embedded in their companies' strategy and present empirical evidence that having women in TMTs increase the likelihood of conducting open innovation. Further, the authors show how women executives' power and institutional level gender parity provide boundary conditions that moderate the relationship between TMT gender diversity and open innovation.

Purpose This study aims to examine the influence of a company’s value chain partners, including customers, competitors and suppliers, on product and process innovation within Vietnamese small and medium-sized enterprises (SMEs). Drawing on the resource-based view and the knowledge-based view, this work focuses on SMEs in Ho Chi Minh City as a representative context for understanding innovation dynamics in emerging economies. Design/methodology/approach This study used a survey methodology, using a structured questionnaire that was distributed to directors and managers of SMEs in Ho Chi Minh City, Vietnam. A random sample of 150 SMEs was selected from a list provided by the local Chamber of Commerce, and 111 completed responses were collected and analyzed to investigate the impact of external knowledge sources on innovation. Findings The analysis of SME responses in Ho Chi Minh City revealed that knowledge acquired from customers plays a significant and positive role in driving both product and process innovation. Customer insights were found to meaningfully contribute to improvements in product development and, to a lesser extent, operational processes. In contrast, knowledge sourced from suppliers and competitors did not show a statistically significant influence on either form of innovation. Practical implications This study provides practical guidance for managers and policymakers in Vietnam. Findings suggest that fostering customer engagement and actively seeking customer feedback can enhance product and process innovation among Vietnamese SMEs. The absence of significant effects from suppliers and competitors highlights the need to strengthen collaboration with these partners to unlock further innovation opportunities in the local context. Originality/value This paper advances comprehension of the interplay between regional forces and SME innovation by systematically examining the asymmetrical effects that varied external knowledge providers exert on open innovation results. By locating the analysis in an emerging market context, this study enriches the theoretical framework of open innovation and illuminates the differentiated utility of external knowledge, thereby deepening the literature on constrained-resource environments.

Assessing the Impact of Open and Closed Knowledge Sourcing Approach on Innovation in Small and Medium Enterprises

Purpose Owing to the growing importance of human resource practices (HRM) and open innovation (OI) in small and medium enterprises (SMEs) context, the purpose of this paper is to investigate the effect of high-performance working systems (HPWS) on inbound and outbound open innovation in SMEs through the mediating role of innovative work behaviour (IWB). Using ability-enhancing, motivation-enhancing and opportunity-enhancing (AMO) framework, this study investigates the direct and i.ndirect effects of HPWS AMO practices and SMEs open innovation through the mediation effects of IWB. Design/methodology/approach This study employed a random sampling method to collect data by surveying 208 participants from SMEs in high-tech manufacturing and knowledge-intensive service sectors. Partial least squares-structural equation modelling is employed to analyse the interrelationships between constructs. Findings The results show that ability-enhancing practices are critical HRM practices that directly influence SMEs inbound and outbound; IWB is positively and significantly related to OI approaches; IWB partially mediates the relations between AMO HPWS and inbound and outbound open innovation. Practical implications The effects of HPWS practices are important in fostering OI in SMEs operating in Czech Republic. In addition, IWB is a partial intermediation that strengthens the relation between AMO HPWS and inbound and outbound OI. Originality/value This study adds to our understanding of the direct and indirect interactions between HPWS practices, IWB and inbound and outbound open innovation in high-tech manufacturing and knowledge-intensive service SMEs in Czech Republic.

The way firms innovate has notably changed in recent years. A clear example is the manufacturing sector which has been experiencing a new revolution in production and innovation. Linked to this industrial shift, manufacturing firms have been adopting more open and collaborative practices to innovate. This phenomenon, known as Open Innovation (OI), is helping firms to acquire and explore knowledge from external sources (inbound process) and to exploit knowledge via the commercialisation of ideas and technology (outbound process). Even though numerous researchers have studied the adoption of OI and its relation to numerous strategic and organisational results, very few studies have focused on investigating the positive influence of diverse OI approaches and practices on multiple dimensions of firm performance from different angles. These drawbacks hinder the diffusion of OI practices and raise the question of whether it is convenient for any firm in any industry to adopt or not to adopt OI. Thus, this thesis helps to fill this gap by examining the extent to which OI practices are adopted by firms and other actors in unexplored mature manufacturing industries and by understanding the unidentified roles that these practices play in relation to different dimensions of firm and industrial performance. This thesis brings together different methodologies and data to investigate OI practices with a novel multi-perspective approach. Hence, OI practices are framed within the industrial context of manufacturing firms in Italy and Sweden, several actors in the food industry, small and medium-sized enterprises (SMEs) from the Italian foundry industry, and also within worldwide SMEs designing and producing supercars. More specifically, using data from 247 European manufacturing firms collected through a tailored OI survey, this thesis supports the relevance of internal context characteristics such as firm size and provides evidence of the relation between configurations of OI models and innovation performance. Through two case studies in the food industry, this thesis demonstrates novel forms of OI practices that can be characterised and adopted by different innovation actors within and around this mature industry. Likewise, drawing from 30 rigorous case studies of small and medium-sized foundries, this research for the first time illuminates the relation between the aggregations of some innovation practices (specifically internal R&D and inbound OI) with a contemporarily relevant dimension of environmental and industrial performance such as energy efficiency.Although foregrounding the practical implications of adopting OI practices, this project also investigates and attempts to contrast some of the theoretical perspectives used when researching OI in mature manufacturing industries. This thesis concludes with an integrative study of the main aspects of the research project to demonstrate the advantages of using a multi-perspective approach to study OI. This last study, originally inspired from two case studies of small carmakers, involved collecting data from 48 small and medium-sized manufacturers of supercars with a survey designed to evaluate OI influence on several types of firm performance. Collectively, the results from this thesis confirm the validity of OI in new research contexts and reveal a combined influence of specific innovation practices on innovativeness, but also on the dimensions of industrial, environmental, and social performance. This thesis contributes to theory and practice by empirically showing that even though OI and the results of practicing it are highly context dependent, adopting OI practices can definitely have a positive influence in the overall performance of firms in mature manufacturing industries, including SMEs and other small actors.

Linkages between Openness and CEO Characteristics in Innovative SMEs

Open Innovation remains the process of enabling inflow and outflow of knowledge, ideas, design, plus technologies throughout the organization during the various stages of the innovation process. This Innovation consists of inbound and outbound open innovations, whereby inbound open Innovation is the influx of knowledge, while outbound open innovation remains the outward flow of knowledge. Previously, studies related to open innovation have only focused specifically on the business world, the industrial sector while less focused on strategy and its implementation in the education sector. This study aims to fill this gap by studying open innovation in ordinary day secondary schools due to their significant contribution to development Malaysian education. Based on an open innovation model and a theory of views based on resources, this study will analyse the role of open and innovative innovation activities government support in determining the innovative capabilities of secondary schools. In this conceptual paper, the author develops the conceptual model that will be used in further research activities in education sector and will contribute to a better understanding of open innovation activities and their practices in secondary schools in Malaysia.

Sustainable development has emerged as a crucial factor enhancing the competitiveness of small and medium enterprises (SMEs) in light of societal expectations and government regulations. Within this context, innovation assumes a significant role in this challenge, particularly for smaller companies facing greater obstacles in fostering innovation. These constraints have prompted both internal and external innovation initiatives, commonly referred to as open innovation. In this article, we scrutinize the influence of environmental practices on innovation endeavors, specifically examining whether the innovation strategy and its implementation facilitate the advancement of open innovation within SMEs. Furthermore, we explore the potential moderating effect of firm owners' gender on these relationships. The research model is validated using data from 543 companies in Ecuador, employing the partial least squares (PLS) method. The findings elucidate how environmental sustainability can promote the adoption of open innovation practices, with the innovation strategy and its implementation acting as mediators in this relationship. The impact of gender only manifests in the innovation strategy pertaining to environmental sustainability. In conclusion, open innovation stemming from the pivotal role of environmental sustainability emerges as a critical driver in augmenting innovation performance across various dimensions, such as quality, growth, efficiency, process enhancement, organizational practices, employee motivation, and acquisition of new product/service skills.

Purpose– The purpose of this paper is to synthesize the extant literature on open innovation (OI) in small and medium-sized enterprises (SMEs).Design/methodology/approach– An examination of the literature was undertaken to review the studies on open innovation in SMEs. The selected articles were classified in different themes and analyzed accordingly.Findings– The study finds that adopting OI by SMEs improves their overall innovation performance. The authors found that a larger number of studies are based on a quantitative approach. Surprisingly, unlike in many other disciplines, scholars of North America have had a limited contribution. European scholars, along with some scholars from Korea and China, have been active in developing this field of OI in SMEs.Research limitations/implications– This study provides theoretical and managerial implications. With thematic analysis, along with identifying gaps, conflations, and contradictions in the literature, this study proposes an agenda for future exploration.Originality/value– The value of this study lies in the integration of the limited but scattered studies on OI in SMEs.