SME OPEN INNOVATION: DIFFERENCES WITHIN THE SIMILAR ACROSS THE R&D INTENSITY SPECTRUM

Abstract

Innovation management theory has its origins heavily grounded in studies of the routines and practices of large-scale and research and development (R&D) intensive enterprises, with a reduced understanding of the small and medium-sized enterprises (SMEs) context. Through a cross-case analysis of 12 case studies along the R&D-intensity spectrum (6 low-medium technology (LMT) and 6 medium-high/high-technology (HMHT) case studies selected), this research study explores our understanding of SMEs’ differences within the similar by asking the following question—how does open innovation manifest itself within the heterogeneous context of SMEs innovation practices? Our findings reinforce the heterogeneity of OI SME innovation practices by revealing the following. First, the rationale and importance of OI adoption differs—principally operational (LMT) vs. strategic (HMHT). Second, distinct OI partners are leveraged depending on the R&D intensity of the SME namely LMT SMEs typically partner with smaller scale SME partners known to them whereas for HMHT SMEs, there is a tendency to partner with larger scale, more geographically and cognitively distant partners. OI adoption for LMT SMEs tended to be short-term in duration, demonstrating a tendency to switchback to a closed innovation paradigm once OI motivating constraints were addressed. In contrast, our findings highlighted how HMHT SMEs explored more coupled OI modes. This study further reveals how OI SME can be peripheral in nature with many SMEs at a competitive disadvantage in the long term as the collaborative capabilities derived from engaging in deeper modes of OI are not being explored.