Open innovation: a new classification and its impact on firm performance in innovative SMEs

Abstract

This paper attempts to deepen understanding of the relationship between open innovation (OI) and firm performance in small and medium-sized enterprises (SMEs). Based on survey data from 306 Korean innovative SMEs, the results of this study show that: (1) broad and intensive engagement in OI and cooperation with external partners are positively associated with firm performance; (2) technology and market-oriented OI modes (Joint R&D, user involvement and open sourcing), involving relatively low level of changes, can positively contribute to performance enhancement; and (3) innovative SMEs benefit from working with non-competing partners, such as customers, consultancy/intermediaries and public research institutes. This work has broadened the evidence available on SMEs’ OI adoption and has proposed a new way to study OI adoption and implementation.

Beyond absorptive capacity in open innovation process: the relationships between openness, capacities and firm performance

“…This is in line with the findings in the literature (e.g. Van De Vrande et al 2009), in the sense that internal R&D demanding certain resources plays an important role in enhancing absorptive capacity (Cohen and Levinthal 1990;Spithoven, Clarysse, and Knockaert 2011) and systematic IP management also demands substantial experience and resources (Ahn, Minshall, and Mortara 2015). Thus, medium-sized firms rather than small firms can take a more open attitude towards OI.…”

“…This suggests that these capacities are essential elements in improving firm performance. By developing various capacities firms can engage in diverse commercialisation routes (Ahn, Mortara, and Minshall 2013;Ahn, Minshall, and Mortara 2015). This confirms the strength of the OI philosophy showing that opening firm boundaries will offer many new opportunities compared to closed innovation processes where internal knowledge is exploited mostly in existing markets following a linear innovation path .…”

“…It is fundamentally also true that a firm's openness attitude will enable a firm to engage in a new value creation process by helping it to overcome psychological hurdles (e.g. not-invented-here or not-shared-here syndrome) (Katz and Allen 1982;Burcharth, Knudsen, and Søndergaard 2014;Antons and Piller 2015), which in turn contributes to performance enhancement (Laursen and Salter 2006;Ahn, Minshall, and Mortara 2015).…”

Understanding the human side of openness: the fit between open innovation modes and CEO characteristics

“…Based on their case analysis, Mortara et al () recognised that OI modes implied changes in technology, market and organisational structure. Ahn et al () developed this concept further, suggesting a new OI classification, based on the dominant changes involved as a result of their adoption. This classification enables us to recognise the heterogeneity of OI.…”

“…Rather it embraces various innovation modes (Spithoven et al, ). All OI modes (e.g., licensing‐in or spin‐off) share a single concept, that is, the fact that knowledge flows across permeable firm boundaries (Tucci et al, ), but each mode distinguishes itself in terms of knowledge flow direction and types of changes (e.g., technological or organisational change) involved in its adoption process (Ahn et al, ). This multifaceted characteristic has fragmented the understanding of OI and occasionally resulted in confusion and disputes between scholars (e.g., Trott and Hartmann, ; Groen and Linton, ).…”