Open characters of innovation management in the Hungarian wine industry

Abstract

Th e paper examines the relationship between the use of specifi c knowledge and economic success among Hungarian grape growers and wine makers. In the last decade, Hungary has been left behind by world trends as represented by the increasing share of the premium and super-premium wines (which utilise higher knowledge) in the export development. According to our survey, one cause of this might be the inappropriate use and management of knowledge and skills which is 'conditio sine qua non' for wine making. Th e Hungarian wine regions (usually with resource-based, fordist type resource endowment) are rather knowledge users. We have found (based on the PCA estimation) that two principal components cover 77% of the total variance: 'Size' and 'Innovation capabilities' . However, although the use and spread of skills is a basic component in explaining the diff erences of variation among the companies, it is not unambiguous in formulating the business success measured in diff erent indicators. Because the small and medium sized enterprises (SMEs) have limited resources in capital accumulation and knowledge creation, they need to maintain living network connections in order to expand their constrained innovation capabilities. Instead of the 'closed' type of innovation and knowledge accumulation, they utilise the 'open' way of acquiring knowledge, where they necessarily share their specifi c information with their partners, but at the same time, they are supplied with new knowledge which might be vital for their own progress. Th e majority of the Hungarian vine-and wine makers are not open enough in the diff erent phases of the innovation process. However, our analysis proves that if they showed up mutuality especially in knowledge sharing with their competitors, they could improve their positions signifi cantly. We conclude that the Hungarian wine enterprises -keeping the idea generation as well as its further development, elaboration and the adequate use within the frame of the company -can achieve market success.

A review of literature on open innovation in small and medium-sized enterprises

“…Networking may not be an efficient activity for service SMEs (Suh and Kim 2012). Among Hungarian SMEs, Török and Tóth (2013) found that the personal networks still play an important role in the success of SMEs. Managing multiple networks are challenging for SMEs.…”

“…However, Lichtenthaler (2008) found that most SMEs are still pursuing closed innovation over open innovation. Török and Tóth (2013) argue that firms that provide their ideas to external parties are more product innovative than non-providers. They found that mutual -rather than one-way exchange -relationships significantly raise the probability that SMEs experience a substantial benefit from contributing to other firms' new product development projects.…”

Work Productivity in Wine Farms in Selected Countries of the European Union

“…Another key internal factor determining work efficiency in agriculture, in particular in wine farms, is the level of their technical and technological advancement. As studies by Tomsik et al (2016) or Török and Tóth (2013) show, vineyard Proceedings of the 2019 International Scientifi c Conference 'Economic Sciences for Agribusiness and Rural Economy' No 3, Warsaw, 5-7 June 2019, pp. 76-83 farms with a significant degree of technology implementation are characterized by higher work efficiency.…”

Open Innovation Systems in Developing Countries: Sustainable Digital Networks and Collaboration in Smes

“…Therefore, in the stage of idea implementation, it is suggested that SMEs use collaboration software, which is also abundant online. Collaboration software is nothing more than a digital network with only a few nodes, which may be a good solution for SMEs in develop ing countries: it is more affordable and applicable than innovation management software; it is ready for use outofthebox; it is easily manageable; and it is intimate enough to allow collaboration partners to gain trust, which is very important for the SMEs (Török & Tóth, 2013).…”