Adopting open innovation for SMEs and industrial revolution 4.0

Abstract

Purpose Industrial Revolution 4.0 is still evolving. The purpose of this paper is to assess the progress of Indonesia in achieving an initiative for Industry 4.0. As the largest country in Southeast Asia, Indonesia plays a critical role in implementing Industry 4.0. In addition, this study proposes an open innovation strategies for small and medium enterprises (SMEs) in facing Industry 4.0, especially in the Indonesian setting. Open innovation is viewed as a long-term innovation model that relies on cross-border commerce between businesses and countries. Design/methodology/approach This study undertakes a comprehensive literature review to capture the necessary insights for establishing an early grasp of solution design. A total of 32 sample papers were qualified using a set of selection criteria designed to find the most relevant existing studies in the Industry 4.0 and Indonesia domains. The meta-details as significant discoveries were processed using a content analysis approach. In addition, the research deployed sentiment analysis from text mining to inter-operate and classify (positive, negative and neutral) in-text data using text analysis techniques to identify public sentiment toward Industry 4.0 in Indonesia. Findings The key finding is that there is a favorable relationship between digital ecosystem readiness and open innovation adoption for SMEs. While, knowledge management is a critical factor in guiding a country’s successful implementation of the open innovation paradigm. Furthermore, some of the major findings revealed that many initiatives for Industry 4.0 are carried out by the private sectors. In regards to the procedure, the role of government is the protection of market regulations. This could be due to preserving fair competition between corporations and SMEs. Local businesses and SMEs should be protected to ensure their survival. In addition, the major cause of the slow adoption of Industry 4.0 in Indonesia is the lack of digital equipment. This is because of the shortage of digital equipment that can create a digital divide between large and small businesses and between industries in the urban and rural areas. Research limitations/implications This study discussed some of the most essential issues of SMEs in adopting open innovation that is required for Industrial Revolution 4.0. It focuses on how digital ecosystem’s readiness influences open innovation adoption for SMEs in Indonesia. By understanding its current state of readiness, it contributes to the policymakers in deciding how and where to adopt open innovation and develop digital ecosystem and identify which ones might best meet their needs for any developing countries. Originality/value This paper is useful to academics, practitioners and policymakers in the fields of technology and public policy. The research provides some initial insights into Indonesia and any developing countries on Industry Revolution 4.0 and the needs for SMEs in adopting open innovation.

Worldwide Research on Open Innovation in SMEs

“…However, the heterogeneity of research purposes marks this period with the abundance of research that accounted for 80% of the scientific production (Figure 2). The increase could be explained by the apogee of regional innovation systems, specifically in the urban environment [262], as well as the adaptation to Industry 4.0 [263] and the role of innovation in recent years [264]. Therefore, this allowed a deepening of OI practices, strategies, sources and their consequent benefits to firms [9,55,166,169,186].…”

Human Capital and Open Innovation: Do Social Media Networking and Knowledge Sharing Matter?

“…Open innovation is one of the mechanisms to provide the growth of SMEs in Indonesia [18]. Young entrepreneurs have the opportunity to grow with the current form of open innovation [16], especially with the founder in SMEs that have higher entrepreneurial characteristics [46].…”

“…Companies work to adopt open innovation to improve firm performance [17]. Previous studies provide an argument for the importance of the study of open innovation [18][19][20][21]. Antecedent factors such as technological innovation technology [22], human resources [23], and knowledge management [24] have a significant effect on open innovation.…”

Understanding knowledge management and upskilling in Fourth Industrial Revolution: transformational shift and SECI model

“…Fourth Industrial Revolution, or commonly known as IR 4.0 or Industry 4.0, is a term often used to refer to the developmental process in the management of manufacturing and chain production. Industry 4.0 offers speed of innovation to enable the rapid deployment of digital technologies, shorten product life cycles, expand business through developing new products and services and improve product development processes (Anshari and Almunawar, 2021).…”