Open innovation in SMEs: Trends, motives and management challenges

Open innovation has so far been studied mainly in high-tech, multinational enterprises. This exploratory paper investigates if open innovation practices are also applied by small- and medium-sized enterprises (SMEs). Drawing on a database collected from 605 innovative SMEs in the Netherlands, we explore the incidence of and apparent trend towards open innovation. The survey furthermore focuses on the motives and perceived challenges when SMEs adopt open innovation practices. Within the survey, open innovation is measured with eight innovation practices reflecting technology exploration and exploitation in SMEs. We find that the responding SMEs engage in many open innovation practices and have increasingly adopted such practices during the past 7 years. In addition, we find no major differences between manufacturing and services industries, but medium-sized firms are on average more heavily involved in open innovation than their smaller counterparts. We furthermore find that SMEs pursue open innovation primarily for market-related motives such as meeting customer demands, or keeping up with competitors. Their most important challenges relate to organizational and cultural issues as a consequence of dealing with increased external contacts.