Managing Open Innovation Across SMEs: The Case of a Regional Ecosystem

Abstract

Small and medium sized enterprises (SMEs) face the inherent tension of being dependent on external partners to complement their internal innovation activities while having only limited resources to manage such open innovation processes. This tension is augmented in the context of the larger ecosystem of complementary partners in which the SME is active. In this paper, we present a qualitative case study of a particular regional innovation ecosystem, with ten embedded SME cases, which shows how the SMEs perceive and manage open innovation through strong collaboration ties with various stakeholders in the ecosystem, including suppliers and competitors. When managing such open innovation processes, we find a particular set of challenges for the SMEs due to the misalignment between their and the ecosystem’s (implicit) business model. More specifically, key findings include the history-dependent innovation processes within the ecosystem, the diverging understanding of the notion of innovation across the ecosystem, constraints of the SMEs’ internal organization, and the importance of shared business objectives and leadership on different levels. These findings highlight specific attention points for managing and developing open innovation in a regional ecosystem, where both the SME and the ecosystem levels of analysis need to be considered.