Open innovation in SMEs

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.

The capacity to innovate has grown to be a major obstacle in the corporate environment in the digital age. For technology-based small and medium-sized enterprises (SMEs), open innovation provides a strategic and cultural means to improve their innovation capacity by using internal and external ideas, resources, and technical knowledge-how. Although earlier studies have examined how open innovation affects big businesses, there is a great knowledge vacuum on how open innovation and strategic orientation affect innovation performance in SMEs, especially in underdeveloped countries. This research fills this need by investigating in Costa Rican technology-based SMEs the link between open innovation, strategic orientation, and inventive performance using a quantitative, cross-sectional methodology. The research supports the suggested hypotheses using Cronbach’s alpha and statistical models, showing that strategic orientation and open innovation favorably affect inventive performance. The results add to the state of the art by giving empirical data from a developing economy setting and pragmatic advice for SMEs trying to improve their capacity for innovation in a fast-changing digital environment. Received: 14 January 2025 | Revised: 15 April 2025 | Accepted: 4 July 2025 Conflicts of Interest The author declares that he has no conflict of interest in this work. Data Availability Statement Data sharing is not applicable to this article as no new data were created or analyzed in this study. Author Contribution Statement Gabriel Silva-Atencio: Conceptualization, Methodology, Validation, Investigation, Resources, Data curation, Writing – original draft, Writing – review & editing, Visualization, Supervision, Project administration, Funding acquisition.

Linkages between Openness and CEO Characteristics in Innovative SMEs

This quantitative correlational study examined the relationship between leaders’ managerial competencies and innovative work behaviors (IWB) in small-and medium-sized enterprises (SMEs). The study's target population was human resources managers in SMEs operating in the United States and Singapore. The theoretical foundation for this study was rooted in the resource-based view (RBV) and the theory of competitive advantage. The researcher utilized a non-experimental correlational research design and a purposive sampling method to collect data. The researcher used the online survey platform Centiment to recruit participants for the study. Centiment collected data from 126 participants (63 in the United States and 63 in Singapore). The participants completed a 5-point Likert survey with 5 demographic questions, 17 questions from the Innovative Work Behavior instrument, and 60 questions from the Managerial Skills Assessment Instrument (MSAI). The researcher analyzed the collected data using R Commander software to determine the correlation between the leaders' managerial competencies (independent variable) and innovative work behavior (dependent variable). The results showed a statistically significant positive relationship between the leader's managerial competencies and innovative work behavior (IWB) in SMEs, with a stronger relationship in Singapore than in the United States. This study provided empirical evidence regarding the relationship between managerial competencies and IWB in SMEs. The study's findings indicated that leaders' managerial competencies trigger innovation in SMEs by influencing workplace innovative behavior, and that collective culture has a greater impact on the significance of this relationship than individual cultures. Owners/managers of SMEs and policymakers can benefit from this study's findings to better understand the relationship between managerial competencies and IWB in SMEs, and to build strategies and programs accordingly to enhance innovation and IWB in SMEs. Future researchers in business administration who are interested in investigating leadership and innovation in SMEs can build on the results of this study.

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.

Small and medium-sized enterprises (SMEs), particularly innovative SMEs, face significant challenges in accessing credit. This paper examines how performance-pay for executives affects borrowing discouragement in innovative vs non-innovative SMEs. While literature establishes a significant relation between performance-pay and leverage, no prior manuscript investigates its impact on borrowing discouragement as a form of credit-rationing. This study analyzes 17,404 SMEs from 47 countries using World Bank Enterprise Surveys data, focusing on performance-pay, innovation, and borrowing discouragement. Results show that performance-pay does not impact fear of rejection regardless of firm innovativeness. However, it reduces discouragement from loan terms due to better creditor alignment. In contrast, innovative SMEs—especially those pursuing radical innovation—face the opposite effect: performance-pay reduces fear of rejection but heightens discouragement from stricter loan conditions imposed by wary lenders. This highlights a trade-off where innovation incentives may improve long-term growth but worsen access to credit.

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.

Both innovating and internationalizing can hold the key to survival and growth among small- and medium-sized enterprises (SMEs). Service innovation in particular is highly relevant in the increasingly digitalized and high-technology global trade. However, there have been until now few studies on service innovation in international entrepreneurship. Thus, in an effort to illuminate its role in entrepreneurial internationalization, the present study examines the profitability impact of service innovation in SME internationalization, while also outlining the differing impacts of entrepreneurial orientation and human capital as the antecedents of both. The empirical data were collected via an online survey of Finnish SMEs in the information and communications technology (ICT) industrial sector, the final sample comprising 104 companies. The data were analyzed through structural equation modeling. The results indicate, first, that entrepreneurial orientation underlies both degree of internationalization and service innovation, yet different dimensions of entrepreneurial orientation have distinct impacts on the two outcomes. Second, we find that the level human capital also determines the level of service innovation in as an antecedent and third, international expansion, but not service innovation, has a negative impact on profitability. We discuss the implications of these results, which imply that SMEs may face an internationalization-innovation paradox in that engaging in both activities may not be a feasible strategic option for them, and that prioritizing internationalizing in favor of innovating may incur costs and result in lower profitability.

PurposeInnovative small and medium-sized enterprises (SMEs) are key economic actors, but they are fragile. Their innovation trajectory requires an evolution in their competencies as their strategy evolves, and this is a particularly critical concern when they are engaged in both exploration and exploitation activities and want to develop organisational ambidexterity. In turn, this brings challenges for human resource management (HRM): some research studies have identified “mobilising” practices for innovation, but few authors have taken a dynamic approach. This study aims to fill this double-theoretical gap by answering the following two questions: how does HRM respond to the challenges associated with the search for ambidexterity in an innovative SME's trajectory? What HRM practices are mobilised in the innovation trajectory of SMEs?Design/methodology/approachThe authors carried out two longitudinal case studies concerning innovative SMEs in the medical equipment sector, which are now over 10 years old and seeking to stabilise an ambidextrous way of operating. The authors conducted 37 semi-structured interviews in 2018–2019 and collected public and internal documents. For each case, the authors identified sequences (Bidart et al., 2013) displaying a certain homogeneity in terms of innovation strategy. The authors then performed a cross-case analysis.FindingsThese case studies produced two main results. First, the trajectory of innovative SMEs consisted of sequences during which competency needs and HRM practices evolved. Despite their similar modes of ambidexterity, the two SMEs have mobilised different human resource (HR) practices. Second, the HRM practices implemented struggle to support the firm at key turning points in the innovation trajectories and can even hinder such changes in direction.Originality/valueThe originality of this work lies in two major dimensions. First, the authors choose to explore innovation and the search for ambidexterity, two themes that are traditionally studied in large firms, in the setting of SMEs. Second, the authors choose a longitudinal method to explore the evolution over time in modes of ambidexterity and HRM, along these SMEs' innovation trajectory. This is a departure from more traditional approaches seeking to identify which HR practices, or configurations of practices, are best able to foster ambidexterity and innovation. It leads the authors to show, in a contingent, dynamic perspective, the importance of the Human Resources Foundation’s (HRF's) positioning and attitude in supporting diversified SMEs’ innovation trajectories. This requires allocation of the necessary resources to the function, which needs time and resources to reflect on how to build the ambidextrous HRM that is essential for the firm's survival.

Despite growing attention to digital innovation, there is a notable gap in research focusing on its antecedents in small and medium-sized enterprises (SMEs), especially given the distinct challenges and opportunities SMEs face compared to large firms. Building on the awareness–motivation–capability framework, this study investigates how professional industry connections influence digital innovation in SMEs, while also examining the moderating roles of industry competition and slack resources. Using data from publicly available sources on Chinese firms, we find that: (1) professional industry connections foster digital innovation by enhancing SMEs' digital attention; (2) industry competition weakens the positive impact of digital attention on innovation; and (3) slack resources strengthen the relationship between digital attention and innovation. This study not only contributes to the understanding of digital innovation in SMEs but also provides actionable insights for managers seeking to leverage external connections and internal resources to drive innovation.

Using survey data for a sample of high-tech small and medium-sized enterprises (SMEs) in the Zhongguancun Science Park in Beijing, we examine the impact of returnee CEOs on the innovation performance of SMEs. Based on both quantitative and qualitative analyses, we find that firms with returnee CEOs are not more innovative than firms without returnee CEOs. However, returnee CEOs do have a positive impact on firms' innovation performance when they work in publicly owned firms, when they have ties with government agencies, and when their tenure as CEOs is relatively long. The findings have important implications for governments in developing countries that aim to increase their countries' innovation capability through attracting returnees and also for returnee managers who want to contribute to the innovation performance of their firms.

Multi-criteria decision making (MCDM) methods are essential tools for assessing multiple factors in various contexts, including innovation in small and medium-sized enterprises (SMEs). In this study, a systematic literature review (SLR) was conducted based on a literature search in Web of Science, Scopus and Google Scholar, covering the period 2018–2024, taking as a basis the general guidelines and main phases of an SLR, in addition, the Preferred Reporting Items for Systematic reviews and Meta-Analyses (PRISMA) method was used, which allowed the selection of 25 relevant articles. From the analysis, four main trends in innovation assessment were identified: Innovation Capacity and Business Strategies, Open Innovation, Evaluation and Management, Technological and Digital Innovation, and Green Innovation and Sustainability. The results indicate that India and China are the countries with the highest volume of publications on this topic, while the business and academic sectors are the most studied, followed by the social sector. In addition, other key factors assessed in SMEs using MCDM methods were identified, grouped into five main themes including industry 4.0 and digital transformation, sustainability and green manufacturing, risk management and business resilience, decision making in trade and markets, and business management strategies and technology selection, broken down into 11 specific approaches. The review shows that assessing innovation in SMEs requires a multidisciplinary and collaborative approach tailored to business needs. It also shows a preference for fuzzy tools and the combination of different MCDM methods. This article provides an updated diagnosis on the use of multiple criteria in the innovation assessment in SMEs, providing a basis for future research and applications in this field.

Research background: Small and medium-sized enterprises (SMEs) play a crucial role in European economic. They are very important for the stability of national economy and for development of innovation. SMEs significantly contribute to innovation because they are under permanent pressure of competitors at the market. On the other hand, innovation in SMEs is hampered by many factors, such as lack of finance, lack of personnel, no experiences, insufficient public policy, etc. Purpose of the article: The main goal of the article is examining the impact of business size on innovation activity and thus confirm the irreplaceable importance of SMEs in the innovation ecosystem, compare innovation activity of Slovak SMEs with EU average. Methods: Several methods were used to achieve the goals. Demonstrating the close relationship between innovation and SMEs is realized through VOSviewer software. Comparison of innovation activity of Slovak SMEs with European Union average is realized through an in-depth analysis of selected indicators of Summary Innovation Index. Findings & Value added: SMEs are indeed the creator of innovation. Based on the results of bibliometric analysis, this fact can be confirmed. The innovation activity of SMEs in the Slovak Republic is below the EU average. This fact is caused by several limitation and problems that SMEs in the Slovakia have to face.

Innovation has been one of the key drivers of sustainable competitive advantage for small and medium-sized enterprises (SMEs). On the basis of a survey sample of 188 Chinese manufacturing SMEs, this paper explores barriers, cooperation networks and policy requirements in innovation for SMEs. This paper reveals that the ‘lack of technical experts’ is the most important barrier; the ‘customer’, the most important cooperation partner; and the ‘preferential tax policy’, the most favorable policy in innovation for SMEs. These findings reveal that many Chinese SMEs have difficulties in achieving successful innovation. Therefore, policies should be made based on internal and external constraints to facilitate innovation of SMEs, and varied depending on the size as well as the mode of ownership of firms.

Resource support of innovative small and medium-sized enterprises for space industry development in Russia