Abstract
The aim of this article is to present findings on knowledge management (KM) and knowledge creation, as well as open innovation in small and medium-sized enterprises (SMEs) in Iceland. Two SME company case studies are presented in the form of a case study involving semistructured interviews with managers and selected employees and in-field observation. Company Alpha is a software company, whereas Company Beta is a family company which produces drinks and snacks. Knowledge creation and innovation is a learning process in both companies. The two companies show very different open-innovation models in practice. The findings regarding the two companies are in accordance with the arguments of Chiaroni et al., where they state that high-tech companies tend to prefer inside-out strategies of open innovation, whereas low-tech companies prefer outside-in strategies. Company Alpha relates to customers late in the process, whereas Company Beta relies on knowledge from customers and suppliers and for new knowledge early on in the process.
Highlights
To strengthen their innovation potential, companies need to increase investment devoted to knowledge creation and innovation, so they can build new products, services, or procedures
It is by no means easy to arrive at a precise definition of such a loose term as open innovation, vast research is available on the subject, especially in larger, technological companies (Chiaroni, Chiesa, & Frattini, 2011; Lee et al, 2010)
The management team consists of eight people, three of whom are the founders of the company
Summary
To strengthen their innovation potential, companies need to increase investment devoted to knowledge creation and innovation, so they can build new products, services, or procedures. Significant research has been conducted in this context emphasizing the connection between knowledge accumulation and its management on one hand, and novel business ideas and practices on the other. It has been widely recognized by researchers that there is a deep-seated positive correlation between knowledge management (KM) and innovation in business operations (Miller & Morris, 1999; Nonaka, 1991; Nonaka & Takeuchi, 1995; Sankowska, 2013; Wang & Wang, 2012). It is by no means easy to arrive at a precise definition of such a loose term as open innovation, vast research is available on the subject, especially in larger, technological companies (Chiaroni, Chiesa, & Frattini, 2011; Lee et al, 2010)
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