Open Innovation in Organization Through Stakeholder Capability During Pandemic (COVID-19): Indonesian SMEs Perspective

Abstract

This study aims to analyze the role of stakeholders who support the open innovation transition in SMEs. This is important because the innovation process has shifted from closed innovation to open innovation which requires good management of organizational capabilities, especially in managing stakeholders and resources owned by the organization. However, in the current pandemic situation, SMEs have challenges in adopting and implementing these open innovations. In this study, a conceptual research model was compiled and produced which elaborated several previous references, and then tested empirically on respondents, namely in SMEs in Indonesia. The responses involved in this study were 218 SMEs, but the complete response are 206 respondents. Data testing was carried out using the Partial Least Square-Structural Equation Modeling (PLS-SEM) statistical method. The results of hypothesis testing indicate that there are four variables that significantly strengthen the effect of closed innovation on open innovation, namely financial capability, network, knowledge management system, and organizational culture (p < 0.01). The moderating variable with the most dominant influence is financial ability (β = 0.915, p < 0.01). Based on the results of this study, SMEs that have high financial capabilities or have advantages in terms of funding and financial management can make the transition from closed innovation to open innovation better or independently. There is one moderating variable that is not proven to be significant, namely technology. These findings can then be used to formulate appropriate policies to support the adoption of open innovation in the context of developing the ability of SMEs to survive during the pandemic.

The Implications of Knowledge-Based HRM Practices on Open Innovations for SMEs in the Manufacturing Sector

“…In addition, new challenges face SMEs such as the emergence of industry 4.0 and the recent pandemic which have affected SMEs' competitiveness and even survival. Accordingly, strategic management in SMEs should adopt and adapt to "open innovation" strategies to overcome these challenges and foster SMEs innovation and competitiveness (Anshari & Almunawar, 2022;Rumanti et al, 2022). Open innovation practices may be the most effective way to advance innovation in SMEs and increase their competitiveness (Sabando-Vera et al, 2022).…”