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H200819

Open innovation in SMEs: Trends, motives and management challenges

Vareska van de Vrande Jeroen P.J. de Jong Wim Vanhaverbeke Maurice de Rochemont

Zoetermeer, November 2008

This report is published under the SCALES-initiative (SCientific AnaLysis of Entrepreneurship and SMEs), as part of the 'SMEs and Entrepreneurship programme' financed by the Netherlands Ministry ofEconomic Affairs.

Most recent EIM reports and much more on SMEs and Entrepreneurship can be found at: www.entrepreneurship-sme.eu.

The responsibility for the contents of this report lies with EIM bv. Quoting numbers or text in papers, essays and books is permitted only when the source is clearly mentioned. No part of this publication may be copied and/or published in any form or by any means, orstored in a retrieval system, without the prior written permission of EIM bv. EIM bv does not accept responsibility for printing errors and/or other imperfections.

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Open innovation in SMEs: Trends, motives and management challenges

Vareska van de Vrande* RSM Erasmus University E-mail: vvrande@rsm.nl Jeroen P.J. De Jong EIM Business and Policy Research E-mail: jjo@eim.nl Wim VanhaverbekeHasselt University, Faculty of Business Studies E-mail: wim.vanhaverbeke@uhasselt.be Maurice de Rochemont Eindhoven University of Technology E-mail: m.d.rochemont@tm.tue.nl

February 2008

* Corresponding author

Vareska van de Vrande RSM Erasmus University Department of Strategic Management and Business Environment Room T7-33 P.O.Box 1738, 3000 DR Rotterdam, the Netherlands T: +31 10 4082208, F: +31 10 408 9013 E-mail: vvrande@rsm.nl

Working paper: Please do not quote or cite without the authors’ permission

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Abstract Although evidence for open innovation practices has been provided for large MNEs, they have not yet been analyzed systematically for SMEs. This paper presents the results of a survey among 605 Dutch innovating SMEs. The results show that SMEs are increasinglyadapting open innovation practices. Moreover, they indicate a difference in the adaption to open innovation between manufacturing and services firms, and between larger and smaller SMEs. Larger SMEs adapting more quickly and in a more structured and professionalized way to open innovation than smaller ones. The survey furthermore shows that SMEs generally pursue an open innovation strategy torealize market-related objectives such as meeting customer demands, or keeping up with competitors. In addition, the results show that the most important barriers respondents face are related to the organizational and cultural differences when cooperating with other partners. Other serious barriers are administrative burdens, financing and knowledge transfer problems.

Keywords Open innovation,SMEs, motives for and barriers to cooperation

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Open innovation in SMEs: Trends, motives and management challenges

1. INTRODUCTION Companies consider innovations as a major engine to enhance their performance and to strengthen their competitive position in the market. Many firms have paid most of their management attention to a greater focus on internal efficiencies of the developmentprocess, team structures, decision making and cross functional interaction. However, as more and more companies bring innovation straight to the heart of their corporate strategies, developing internal innovation capabilities is no longer sufficient to gain and sustain competitive advantage. Since innovation strategies look increasingly similar and commoditized, more and more organizations try tofurther improve their innovation performance through intensifying collaboration across industry networks and partnerships, opening up their innovation processes in line with the open innovation framework (Chesbrough 2003, 2006; EIRMA, 2004). Traditionally, open innovation has been analyzed mainly within the context of large, multinational, technology firms (Chesbrough, 2003). Although Chesbrough et...
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