Academic journal article Issues in Informing Science & Information Technology

Open Innovation in SMEs: From Closed Boundaries to Networked Paradigm

Academic journal article Issues in Informing Science & Information Technology

Open Innovation in SMEs: From Closed Boundaries to Networked Paradigm

Article excerpt

Introduction

Innovation, in general sense may be seen as a process of designing, developing and implementing a novel product or service to improve economic, physical and logical parameters in the process. Open innovation, on the other hand, incorporates joint efforts from in-house capabilities and possible outsourcing or combination of several input paths during the product or service development.

However, innovation is not just any sort of change in an entity. It focuses on qualitative changes, and especially targeted to enhance knowledge gain that would lead to economic gain. It is not just adapting someone's novelties, but it creates something of its own as a new, at least not existed in exactly in such form before. Innovation may incorporate product specialization, or targeted commercialization, or an invention deliberately attempting to enhance the product value.

There could be product, service, process or technological innovation at the organizational level, or organizations at the grass roots, and be it fostered collaboratively. In the paradigm of opening the innovation process adaptable to the global environment to be termed as open innovation by incorporating knowledge flux from inside or outside (crowdsourcing), leading to unilateral development or outsourcing incorporates several stages of development (see Figure-1). It could follow any of these separate channels, or accommodate more than one channel to produce an innovative product. However, in Figure-1 authors are emphasizing on incorporation of input fluxes in the first three stages accommodating crowdsourcing to improve the business process, and through outsourcing at stage four the production and marketing chain can be improved further.

[FIGURE 1 OMITTED]

In the context of open innovation (OI), it is seen as utilization of inbound and outbound knowledge flows converting to economic values, and acceleration of product development and marketing accumulated ideas leading to added value chain (De Jong, Vanhaverbeke, Kalvet & Chesbrough, 2008). Diversified factors affect the open innovation process, in addition to an organization's inherent entity. As illustrated in Figure-2, it incorporates management, governance, skills, technologies and policy matters. It also integrates relationship of open innovation factors with other interrelated organizations, institutions and agencies. However, the fact is that in the arena of open innovation, much has not been researched in these aspects. Above all, at the policy making level, not enough work have been carried out to facilitate familiarization of positive aspects and impact of open innovation to the policy initiators, especially at the socio-economic strata. Furthermore, the role of government remains unchartered in many facets in the decision making process of open innovation at the national level.

[FIGURE 2 OMITTED]

Till to date, most studies have examined open innovation at the organizational level, basically for two reasons. Firstly, innovation is traditionally conceived as the outcome of deliberate actions of a single entrepreneur, and thus R&D competition has also been styled as an innovation race between two or more entrepreneurs. Secondly, the value of a technological invention is realized only through a business model of the enterprise (Chesbrough & Rosenbloom, 2002). While it is very natural that the business model may easily spill over the boundaries of an enterprise or even an industry (West, Vanhaverbeke, & Chesbrough, 2006).

Most of the researches in open innovation remain restricted towards targeting common stakeholders through major global entrepreneurs or their alliances. In addition, a few of those global business houses are controlling the entire market or system of open innovation development through process modification and or diversification of resources. Despite immense potentiality to reach out the stakeholders at the grass roots through open ended demand, diversity of product variation, and scale of economic capacity major contemporary researches are confined towards generic pattern-oriented clients. …

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