SMEs Digitalisation Through Clustering, the Role of Open Innovation: A Research Agenda

Abstract

Clustering has been a widely pragmatic practice of small and medium enterprises (SMEs) for innovation during the last two decades. Though its application is complicated due to the challenges and issues in low and middle-income countries, it is expected that all SMEs will benefit from the unique learning and innovative opportunities in a cluster. A systematic review and research agenda on how open innovation in a cluster could stimulate digitalisation in SMEs has not been addressed. Hence, this study seeks to review existing literature on the role of clusters in fostering SMEs' digitalisation through open innovation practices. The research objectives are to examine SMEs' practice of open innovation, analyse the benefits and assess the intermediate role of a cluster for digitalisation within the context of SMEs. The paper aims to provide a framework for future research by presenting propositions. The methodology and approach for the study with a discussion on data extraction and synthesis were articulated. A comprehensive review of the literature to justify the approach was applied. A detailed inclusion and exclusion criteria were presented. Also, the selection process for assessing the articles was provided. This review scrutinised published peer-reviewed papers between January 2014 and December 2021. Findings from the reviewed papers show that cluster development will increase specialisation and divide labour among participating firms. It reveals the process of open innovation in SMEs' practice and the management of open innovation practice in SMEs. Also, it will improve collaboration, shared infrastructure, and knowledge sharing for increased market competitiveness. In addition, collaboration in a cluster will reduce the cost of SMEs' digitalisation, promote new firms, and reduce operational costs. Some beneficiaries of this research were highlighted. Finally, directions for future research with suggestions were comprehensively provided.