Open Innovation of SMEs - An Innovation Ecosystem Perspective

Abstract

In this paper we study SMEs' open innovation from an innovation ecosystem perspective. We divide an SME's external linkages with its partners in an innovation ecosystem into two types (i.e. the Linkages of an SME with its Prominent Organisations (LPO) and the Linkages of the SEM with its Service Intermediaries (LSI)). We then examine the relationships between LPO (and LSI) and the SME's innovation performance, and analyse the moderating effects of the SME's absorptive capacity on the two relationships. Research results support a positive relationship between LPO and SMEs' innovation performance, and a positive relationship between LSI and SMEs' innovation performance and a positive relationship between LSI and LPO. In addition, research results shows that when measured by R&D Intensity SMEs' absorptive capacity negatively moderates the relationships between LPO (and LSI) and SMEs' innovation performance, whereas when measured by IT adoption, SMEs' absorptive capacity positively moderates the two relationships. Relevant theoretical and managerial contributions are discussed.