Abstract
This study investigated the effect of supplier and customers’ collaboration on product innovativeness in manufacturing SMEs. Using a cross sectional survey design with a sample size of 196, a standard multiple linear regression (MLR) was performed between product innovativeness as the dependent variable and the dimensions of supplier and customer collaboration, as independent variables. The results of the supplier collaboration regression indicated that the predictors explained 45.1% of the variance (R 2 =.477, Adj R 2 =.451), F (6, 119) = 18.115, p < .001; t=1.995.; that of customer collaboration indicated that the predictors explained 38.8% of the variance (R 2 = .388, Adj R 2 = .358), F (6, 119) = 12.597, p < .001; t=6.441. Understanding customer needs is the only dimension that significantly contributed positively to predicting PI (B = 1.169, p = .056) t=1.930. It is concluded that supplier dimensions of win-win relationships, deep suppliers trust, expertise from suppliers and support in product launch will positively predict PI. Similarly, customer collaboration dimension of deep understanding of customer needs will positively predict PI. The researchers recommend the setting up of SMEs support policies that promote collaborations in research for purposes of sharing information / accessing the diverse knowledge base on new product design, development and production.
Highlights
Innovation is not a firm internal matter but is increasingly generated in collaboration with external firms
The results show no significant predictor of customer collaboration on Product Innovativeness (PI) except for the unique significant contribution of understanding customer needs that positively predicted PI (B = 1.169, p= .056) t=1.930
The findings imply that taking all other independent variables at zero, a unit increase in understanding customer needs will lead to a 1.169 increase in PI
Summary
Innovation is not a firm internal matter but is increasingly generated in collaboration with external firms. Suppliers and customers may provide a valuable contribution to new product. 2013, Vol 3, No 5 development (NPD) as they provide access to external knowledge that complements the firm’s internal knowledge base. This external knowledge is important as innovation is considered the result of a recombination of elements from different knowledge bases (Henderson & Clark, 1990; Kogut & Zander, 1992), which usually do not reside within a single firm. The actual contributions of suppliers to innovation are underexposed. This paper focuses on what knowledge suppliers and customers contribute to innovation. Several studies have found that supplier and customers collaboration is positively related to product innovativeness. Many studies do not explicitly describe when and whether suppliers and customers are the brains behind the innovation, if they contribute with new technologies, if they are used as sparing partners, or if suppliers and customers contribute in another way to innovation
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