Selective Adoption of Open Innovation for New Product Development in High-Tech SMEs in Emerging Economies

Abstract

With the diversity of customer needs and complexity of technology innovation, many high-tech small- and medium-sized enterprises (SMEs) turn to open innovation, to produce the perfect match between market demands and firm resources. However, questions still exist in relation to open innovation in SMEs. Based on a framework combining both inbound and outbound open innovation with the four-stage new product development (NPD) process, this article explores the open innovation strategies adopted by high-tech SMEs in emerging economies for NPD and the reasons behind it through case studies. Results show that high-tech SMEs in emerging economies selectively adopt open innovation for NPD at different stages with various partners based on their needs. High-tech SMEs prefer to be closed to protect the know-how at the experimentation stage. Regarding the open innovation strategy, at ideation stage, SMEs adopt inbound open innovation for basic research and customer knowledge, while at manufacturing and commercialization stages, SMEs conduct both inbound and outbound open innovation. The analysis raises awareness of customer knowledge and customization to high-tech SMEs for NPD. This article contributes to the theories and practices on open innovation in SMEs.