Exploring open innovation collaboration between SMEs and larger customers

Abstract

PurposeThe purpose of this paper is to explore open innovation (OI) collaborations between high-tech small and medium-sized enterprises (SMEs) and large customers. The research aims to add new insights into how smaller firms attract and build trusting relationships with larger customers for the purpose of innovation, and to highlight customers’ contribution in SMEs’ innovation process.Design/methodology/approachThis exploratory research is based on three case studies and adopts a process perspective to gather qualitative data on OI collaborations, focusing on the inherent dynamics, and evolution in long-term relationships.FindingsThe study provides insights into how SMEs develop OI relationships with both industry and research customers by building trust through various mechanisms. Motivated by the potential benefits of OI in strengthening the firms’ technological edge, the SME managers proactively and strategically developed and managed their OI relationships. The results proved that large customers contributed greatly to the SMEs’ innovation processes both directly and indirectly.Practical implicationsThe research provides advice for smaller firms which are considering adopting an OI strategy with customers through mechanisms such as trust building and enhancing legitimacy.Originality/valueThe research adds to the OI literature on SMEs by exploring how smaller firms manage OI challenges, exploit benefits, and develop trusting relationships with larger customers and research institutions.