Open Innovation through Interconnection between Small and Medium-Sized Enterprises and Large Enterprises

Abstract

In Japan, where economic growth is stagnant, it is necessary to implement a new growth model for manufacturing industry to grow again. In this regard, exploitation of Small and Medium-sized Enterprises (SMEs) with high and niche R&D and/or manufacturing capabilities in form of open innovation is a key. Although previous researches showed open innovation had become implemented more widely than ten years ago, in Japan, open innovation involving SMEs has not been widely adopted so far. In fact, there are several hurdles to overcome to realize open innovation with Japanese SMEs, such as difficulties to access their implicit information, which is typically disclosed only to trusted parties, and lack of network of local coordinators, including local bankers and personnel of local industry development organization, who have access to SMEs' technical information in their small territories. Therefore, it is necessary to organize network of these local specialists to search for broad range of SMEs. Recently, several companies have been trying to connect SMEs across Japan and Large Enterprises (LEs). In this paper, business model of one of such companies was analyzed, and the importance of the platform integrating Information and Communication Technology (ICT) and manpower, which connects local coordinators with implicit knowledge of SMEs and LEs is discussed.