Small- and medium-sized enterprises (SMEs) face the inherent tension of depending on external partners to complement their internal innovation activities while having limited resources to manage such open innovation processes. Given the importance of collaborative efforts between multiple stakeholders, we address the open innovation challenges from the SME perspective at the business-ecosystem level. We present an inductive case study of a particular regional ecosystem and focus on the inter-organizational collaboration between SMEs and other stakeholders in the ecosystem. With this focus, we explore how SMEs perceive, organize, and manage open innovation through strong collaborative ties with other ecosystem members. We identify a particular set of challenges for the SMEs due to the misalignment between their business model and that of their ecosystem. Specific findings include the link between innovation type expressed by diverging understandings of the notion of innovation across the ecosystem and the innovation form (here, open innovation), which should be organized and managed on multiple levels of analysis (SME, inter-organizational, and ecosystem). These findings highlight specific attention points for managing and developing open innovation in a regional business ecosystem, and they contribute both to the business-ecosystem literature as well as open innovation literature.

Introduction

Open innovation, which describes knowledge inflows and outflows for improved innovation performance, is widely acknowledged as an important innovation management practice (Chesbrough, 2003; Chesbrough et al., 2014; Dahlander and Gann, 2010). Many aspects of this field have yet to be explored, however, and our understanding of the open innovation concept therefore remains underdeveloped (Bogers et al., 2017; West and Bogers, 2014, 2017). For example, one area receiving increasing interest in recent years is the role of open innovation in small- and medium-sized enterprises (SMEs) (Brunswicker and Van de Vrande, 2014; Vanhaverbeke, 2017; Vanhaverbeke et al., 2018). SMEs do not benefit from open innovation in the same way as large firms (Usman et al., 2018; Vanhaverbeke, 2017), and therefore we cannot easily benchmark the successful open innovation examples from multinational corporations to small firms. A more detailed understanding of the exact conditions under which SMEs can successfully implement an open approach to innovation therefore remains lacking. This is particularly true when considering the relatively few studies focused on open innovation in business ecosystems (Radziwon et al., 2017; Ritala et al., 2013; Van der Borgh et al., 2012), thus amplifying the lack of understanding of how SMEs can manage open innovation in such ecosystems. In light of how new opportunities are generated for additional value creation much more often in open innovation than when following closed innovation principles, this research aims at increasing our understanding of the inter-organizational collaboration between SMEs and other regional business ecosystem stakeholders through the lends of open innovation. That is why this paper explores how SMEs (embedded within a larger ecosystem) perceive, organize, and manage open innovation through strong collaborative ties with other ecosystem members.