Critical Success Factors for Open Innovation Strategies in SMEs: Who or How?

Small and medium-sized enterprises (SMEs) have been found as the best way to renew the economy. Nevertheless, SMEs suffer from a number of structural weaknesses. The strategy of Open Innovation is considered ideal to address these weaknesses. This chapter builds on the investigation of 75 SMEs implementing Open Innovation projects across Europe and which are identified as success outliers. Four different types of partnerships are analysed. Partnering with Public Sector Research Organisations is promoted through “golden partnership” agreement and allowing SMEs to be present at their special events while government sponsored programmes are used to access funding and potential partners. Having people on board with previous experience with Large Firms facilitates the partnership with an SME while the SME’s internal management structures may have to be adapted and the SME can consult specialist advisor when negotiating the agreement. Partnerships with Other SMEs are enhanced by establishing clear rules of partnerships, such as roles, risk involved, and intellectual property, early on in the relationship and managing relationships at the personal level play a crucial role in sustaining these partnerships. As for engagement with the Crowd and Individuals, SMEs can validate new technologies, use crowdsourcing to showcase radical innovations and identify further investments and/or potential customers; utilising Intellectual property rights as an incentive for participation and quality assurance was found as a key success factor. The successful completion of an innovation project in an SME will require in all likelihood different types of partnerships at different stages of the innovation process. This practically means that for an SME needs to learn how to systematically apply open innovation developing ambidextrous Open Innovation capabilities to identify, monitor, evaluate and possibly terminate partnerships with different partners.