Theoretical Model for a Local Economy Open Innovation Program

Abstract

This chapter presents a model of open innovation as a collaborative effort of firms, mostly SMEs that are managed under a government support with the assistive involvement of academia. While normally industry-academia cooperation is R&D focused, the model presented is a model of open innovation not involving dedicated R&D. It deals with the process of assimilating existing technologies and methodologies; the model focuses on search, identification, and implementation phases to improve competitiveness through open innovation strategies. The model claims that specifically for SMEs, innovation not related to R&D, and especially open innovation, is hard to deal with alone. Therefore the model presents a group of SMEs working together towards that end, and the role of the governing authority supporting them. The model is supported by a short case study of a national program of Israel, the Users Association for Advanced Technologies.

Collaborative Research (CR)

“…Further, the capability to manage that knowledge and innovation on the outside as well as on the inside is becoming an important element of the firm (Naqshbandi & Kaur, 2010). This study observes that open innovation and collaboration in research provide sustained impact on specific sectors of entrepreneurships, which is based on a knowledgeable operation (Porath, 2012a;Porath, 2012b) that has been practiced since 1994.…”

“…In those sectors, managing external Innovation would require the ability to search, identify and select the right innovation components required by the firm, assess their cost and rate them according to a combination of criteria, such as cost, benefit, time to market, legal complexity etc., which would require management capabilities that are not often existing in management teams that have never managed such type of operation before. In fact as observed in earlier work (Porath, 2012a;2012b), without that capability this type of SMEs find it hard to assimilate innovation, even when most of the work is performed on their behalf, as there is no other choice than to be able to manage innovation once the SME has reached the absorption stage.…”

“…The cases presented by Porath (2012aPorath ( , 2012b regarding the open innovation scheme (User's Association) shows specific problems and relevant answers. In these two case studies, one justifying a generic business model and the second dealing with a detailed case study, thus reviewing the finer points of the case, the industrial partners, their innovation needs, the operation of the UA and the results and lessons to be learnt.…”

“…Recent work has also shown that open innovation is a critical source of innovation for SMEs (Rahman & Ramos, 2012). There are claims that it is not only a growth mechanism related to the entrepreneurial phase of the firm, but it is also an important innovation source for the SMEs (Porath, 2012a;Porath, 2012b). Furthermore, it has been observed that external innovation management capability is important in order to maintain competitiveness even in those sectors that are not R&D intensive (Porath, 2012a).…”

“…As mentioned, it is a conceptual paper that is based on two recently published book chapters (Porath, 2012a;Porath, 2012b), focusing a governmental instrument for encouraging Open Innovation via Collaboration between Industry and Academy; one as a case study and the other one as a model of this study that discusses the effect of transaction costs in entrepreneurships as a means of open innovation. The instrument namely, the User's Association (UA) is an association supported financially by the government; which surveys, selects and helps SMEs, assimilate technologies or technological solutions to solve problems identified for specific sectors.…”