that large firms(>250 employees) are collaborating on average with more external partners than small firms.
human resources and the lack of technological capabilities force them to look for different types of innovation partners
Accordingly, they may have to work in several consecutive steps, which in some cases look like a bootstrapping strategy
innovation experts. Some cases where not useful to illustrate open innovation in SMES. Other companies were acquired just
should have less than 500 employees. The companies are active in a wide range of industries.
and have 500 employees; other companies are just a few years old and have less than five employees.
The reader should thus not be surprised by the heterogeneity 13 of the cases. The diversity of the themes we will discuss illustrates how open innovation can take
learning process led by sleep experts. The QOD case illustrates that developing a successful business model that ultimately changes the industry starts with nothing more than the conviction of a well
less than 20 employees) that is active in the bicycle accessory market. It is a third-generation, family
processing steps and were thus more expensive when manufactured in countries with high-labour costs.
manufacturers, professional organizations, user groups, social representatives, and teaching institutions that created a totally new concept for the patient hospital room:
hospitalisation is the central concept around which the consortium works. The Patient Room of the
Medical staff must care for more patients; patients stay for shorter hospitalisation periods; and the drive is strong to increase the medical staff†s productivity
Furthermore, retailers can adapt their promotions to each customer†s personal style This approach not only provides extensive capabilities for the buying process,
started a glass works company that produced its own line of glass instruments. This Belgian company
and material experts. The third step is promotion. In this step, Curana organized information sessions to promote its new ideas among potential customers.
In this way, the company r eceived valuable feedback from potential customers. Realization is the fourth step.
collaboration with external production partners, mold makers, and material experts Using the so-called Original Strategic Management (OSM) model, Curana and its innovation partners
After consulting with an examination board of sleep experts, QOD decided to produce a functional quilt that would reduce the temperature variation under the quilt to
specialized workers, and small innovation port folios such that risks associated with innovation cannot be spread.
It combined valuable insights from sleep experts with the PCM technology, which has required the characteristics to improve sleep.
and tested with the help of medical experts. QOD€ s first functional quilt†branded as Temprakon†was the result of linking PCM technology with insights about sleep comfort
Jaga also explored initiatives to spur the creativity of employees and external partners by setting up
who complained that they only could do real nursing work during 50%of their working time.
The remainder was absorbed by administration and other tasks. The small consortium took this feedback as an input to set up an IT-system where nurses have more time
If your partner leaves the company or secures another position, the joint project may stop
of Saflot Creative Consultants) added: â€oeour antennas are open to society and technologies, and we record a lot.
Disciplining disloyal partners only works under certain circumstances. First, a strong leader must operate in the network,
partners only works if the innovation network is instrumental in creating a competitive advantage for the companies involved.
Some of the networks work with open books to ensure that all partners involved use fair overhead costs
employees, for instance, did not understand why management was preoccupied with managing the network of partners while internal management problems also had to be solved.
firm in the case inventors are companies doing contract research, external designers, or employees Several firms we interviewed chose not to co-patent an invention that was developed co with their
SMES is hampered by lack of financial resources, scant opportunities to recruit specialized workers poor understanding of advanced technology, and so on.
Universities, research labs, crowds of experts, lead users, and knowledge brokers are just a few examples of potential external sources of kn owledge.
collaboration and are eager to work with the venture Finally, Toine also had to license the technology from DSM.
detected that the existing turbo-fryers on the market did not work, and his simple adaptation to the air
packaged with an inspiring recipe booklet, written by a culinary expert, which contains 30 easy-to
o Licensing to small firms implies significant work in return for small licensing revenues The venture manager,
What works is a vision, not a dream. In most cases, the vision can be considered as a new
consultants develop. In contrast, they are spurred to take action when they are confronted with the testimonials of entrepreneurs who are using open innovation successfully to develop new businesses
SMES are companies with less than 250 employees (N=792; lager companies (â ¥ 250 employees;
N=175 The calculation covers the period 2002-2004 Open innovation can be measured in different ways.
labs, private R&d organizations, and consultants (iv; institutional sources (universities and university colleges (v), government and public research organizations (vi)),
calculated by dividing the search strategy score by the employment of the firm External R&d indicates how heavily companies rely on five possible external R&d activities:
reflects external R&d per employee Collaborative innovation indicates whether innovating firms engage in collaborative innovation activities with
consultants and private R&d organizations iv); ) universities (v; and public research organizations (vi. Collaborative innovation is captured by calculating
collaboration per employee Variable Small and medium-sized enterprises N-SME=792 Large firms N-large=175
Moreover, small contests can be held among employees, suppliers, and local communities of designers, engineers, and so on
and as a short paper within the work of the High-level Expert Group on The Future of Community Re
-search Policy (Luc Soete, coordinator)( 2009. We thank partic -ipants at these seminars, particularly Ben Martin and Luc Soete
Ark (2005) found that the US lead in labour produc -tivity is explained almost fully by two causes, both
-glomerates in countries with rigid labour markets tend to keep obsolete technologies alive for longer periods
-tion of graduates who sought employment elsewhere, universities served as sites for the dissemination and diffusion of innovation
WWII, to meet a requirement for calculating firing tables for the US ARMY. After this development, in
†asked that members of the staff sign a release form that would prevent them from receiving
IBM hired Von neumann as a consultant in January 1952 and started a collaboration with his organiza
PROLOG was born in 1972 after the work of several French researchers mostly based at the University of
by Bjarne Stroustrup, on the basis of the work he did for his Phd at Cambridge university (UK
science, particularly in the work of two intellectual giants: Alan Turing and John Von neumann. The
14,000 employees in France, ten fac -tories, and a global turnover of 201 million French francs, which had multiplied by 10
computers started with the pioneering work of Konrad Zuse well before WWII. Zuse started his
Plankalkã l of Zuse in 1945, the work of Rutishauer and Bohm in Zurich in 1951,
and the work of Semelson and Bauer in Munich in the 1950s Bauer, 2002. Semelson studied the structure of
Jointly, they developed fundamental works on com -pilers (Books LLC, 2010b Indeed, Zuse†s work is considered by historians of
computing technology to be the earliest pioneering work in the modern era. In his reconstructions of
†the Internet works today because of abstrac -tions that were products of the human imagina
-terplay between theoretical work and pragmatic goals (Bonaccorsi, 2010 A crucial point is that this process is dynamic and
criteria in recruitment and promotion of academic staff, as well as ambitious goals in the selection of
Competition for scarce academic staff of top quality may be considered a layered game only highly ranked institutions can compete for very
-tain many results by postponing the promotions in the career. Second, we are observing average data
promotion to a higher level may occur within a year of the initial promotion The dynamics we observe are the result of intense
competition among universities to attract the best young researchers, then the best young professors Without strong competition among universities
Taking into account different employment positions, they changed 5. 32 times. It was not possi
-ble to normalize these data by age or seniority, given several missing items of data.
and each 15 years of professional seniority It has been suggested that Europe and the USA differ structurally in the geographic mobility of in
employment positions after Phd 786 1 49 5. 32 4. 376 Number of different country mobility
seniority 604 0. 02 2. 00 0. 078 0. 111 European competitiveness: IT and long-term scientific performance
-ent and competitive recruitment procedures for re -searchers, larger mobility of researchers. The creation of the European Research Council has been
-tion, labour market regulation is called into play, as flexible labour markets in the USA facilitate the re
-deployment of the workforce and then the adoption of innovation much more than in Europe We suggest a complementary interpretation, but
workers and/or by lowering real wages. There is historical evidence from the literature discussed in
started to work with large service firms as potential customers as early as the 1960s. While the most
placing more flexibility in the labour market Notes 1. The EU Report includes STMICROELECTRONICS as incorporated in
pioneering work in software during the 50s in Central europe. In History of Com -puting: Software Issues, U Hashagen, R Keil-Slawik and A l
Follow this and additional works at: http://arrow. dit. ie/buschmarart Part of the Marketing Commons
This work is licensed under a Creative Commons Attribution -Noncommercial-Share Alike 3. 0 License Recommended Citation
We would like to thank the experts who reviewed the exposã and interim draft of this Policy Brief:
-nomic growth and employment. Europe has per -formed relatively badly in generating high-growth innovative companies that quickly become global
-works, improved access to equity finance, and fa -cilitated internationalisation Prepare breeding ground: Policies should pre
and with ten or more employees at the beginning of the observation period. â€oega -zelles†are born newly high-growth enterprises not
companies for job creation. The number and share of high-growth enterprises is small, but the number
One group of experts argues that govern -ments should do both, while others favour a policy
-try, Trade and Labour (OSC. The OSC operates no policy tools aimed explicitly or exclusively at
-ers, labour law, bankruptcy law, taxation, and also to SME policies rewarding staying small. Hence rather than trying to â€oepick winnersâ€, policy makers
-rillasâ€. 1 These enterprises are seen as important drivers of economic growth, employment and social well -being.
economic growth and job creation) to support all SMES"a little bit, "or to concentrate efforts on those with the highest growth potential
than 10 employees) as%of all enterprisesâ€, see p. 37 3 These countries are also home to many high-growth innovative SMES but the conditions under
as measured by employment (or by turnover), are enterprises with average annualised growth in employees (or in turnover) greater than 20%a year, over a three-year period,
and with ten or more employees at the beginning of the observation period. †4 A size threshold of ten employees is suggested to
avoid the growth of micro enterprises distorting the picture. Excluded from this definition are companies that
five years but nevertheless have more than 250 employees. Animal metaphors have some popularity in lit
includes for example new companies that grow from ten to 18 employees within three years †reaching a
than 250 employees. Nota bene, the obvious consequence of high growth of SMES is that they soon turn into
or a new organisational method in business practices, workplace organi -sation or external relationsâ€. 11 The minimum requirement for an innovation is that it must be new or signifi
ï Interviews with individual experts ï Expert survey Secondary data analysis ï OECD and Eurostat databases
Three expert interviews were conducted for this Policy Brief: One with OECD economist Jonathan Potter one with US venture capital and innovation policy advisor Burton Lee,
Two experts were charged with guiding the research for this Policy Brief, constituting an advisory board ï Allan Martel, President of Allan Martel Consulting based in Ottawa, Canada
These experts had agreed to review drafts of this policy brief and contributed to the workshop where the re
Allan Martel Consulting also contributed a case study (see section 5. 3) and an expert statements paper (statements are used throughout the Policy Brief
-tion, rewards for innovative employees, possible income limits, and regulations of sideline income including equity shares in new companies) of entrepreneurial researchers.
-neurial activities of employees in large companies, and recognition of business relationships of uni -versity researchers in peer groups
system (e g. employment and bankruptcy law Economic stability Right timing Resources Knowledge/skills Technological: e g R&d, IPR protection
system (e g. employment and bankruptcy law Economic stability Right timing The arrow â€oeright timing†only indicates that the right time matters;
barriers to competition etc but what is not so clear is what combination of conditions works best and, indeed, what
Share of high-growth enterprises (employment definition) in%of enterprises with ten or more employees 0
1 2 3 4 5 6 7 8 9 10 Manufacturing*(2006) Services**(2006 *Mining and quarrying;
***Employer enterprises with fewer than 250 employees Source: OECD (2009), p. 29 The picture is similar for â€oegazellesâ€.
terms of full-time employment or full-time equivalents. The largest share of high-growth companies was found in Norway (27),
-nants and strategies of young companies, based on 70 executive cases from 22 different countries and sur
many experts took a similar view, high -lighting that Europe is largely lacking such opportunity-looking entrepreneurial spirit
As regards impeding market regulation, highly regulated labour markets may be an important barrier for companies to grow. 33 As innovation policy advisor Burton Lee states:
to hire staff quickly -and you need to be able to dismiss them again if necessary.
employees in Europe that entrepreneurs and company managers are extremely cautious about hiring. †34
Sweden and Norway with traditionally highly regulate labour mar -kets, while Austria, a country with a fairly loose labour market regulation, has only an average share of high
-growth companies (see section 3. 2 above Since the European culture is said to favour security,
See also Minniti (2008), p. 787, suggesting that in developed countries labour mar -ket reforms may be particularly conducive to â€oesupport the growth of high-performance venturesâ€
High-growth enterprises are very important for employment creation Considering policy makers†desire to create jobs,
The importance of high-growth new companies for job creation has in recent years been substantiated widely by economic research.
found that â€oethe top 1%of all companies ranked by the level of revenue (job creation contributes 44%(40
These 691 companies made up 4. 9%of new companies with more than 10 employees in
40 See Finnish Ministry of Employment (2011), p. 6 Policies for high-growth innovative SMES v1. 6
For example, the top 5%of companies measured by employment growth created two-thirds of new jobs in any given year.
â€oeonly start-ups with greater than twenty employees have persistent employment effects over time and only in
small share of high-growth enterprises for overall employment creation in several countries. 43 Other studies
-mains Industrial policy, social policy, labour policy Industrial policy, innovation policy, labour policy Source: Autio et al. 2007), p. 79
52 Autio/Kronlund/Kovalainen (2007), p. 76 53 See Littunen/Niittykangas (2010) for the importance of entrepreneur†s know-how for high growth of firms in the Fin
The European commission considers the promotion of SMES as very important. Its numerous related activi -ties cover the"Small Business Act (SBA)" for Europe,
The Group of Independent Experts concluded that â€oeeurostars should not only be sustained but pref -erably its budget should be increased in the future.
-tomers and industry experts as well as support to find the necessary resources, above all funding and em
team, made up of twelve employees, selects 10-15 companies to be supported. The team applies eight se
senior management consultant Rebecca Scheel †the applying companies need to be at the right develop
business consultants. These companies then do a pitch to Accelerace†s investment committee which makes
The investment committee is made up of several investors, industry experts as well as Symbion†s CEO. The initial pitch to enter the programme resembles a typical investor pitch, while the final
pitch includes validated information for customers and industry experts, an actionable operational plan, and a
-formance, such as employees, revenue growth and number of customers. A mid-term evaluation is expected to be ready in autumn 2011.
may be the VIGO programme which was introduced in 2009 by the Ministry of Employment and the Econ
-trepreneurs and executives.(.The Accelerators are not consultants--they are co-entrepreneurs who in -vest in the companies they work with to guarantee common goals and passionate development effort. †72 The
Accelerators and other programme participants use their networks to funding sources, potential customers and partners to accelerate the growth of the target companies.
At the beginning of 2008 the innovation department of the Ministry of Employment and the Economy estab -lished a division for growth ventures.
on measures facilitating access to finance, foreign markets and human resources. Access to finance and foreign markets will be discussed more detailed below in sections 4. 2. 2 and 4. 2. 3. Examples of policies for
easing access to human resources include the following ï The SPRING programme of the government of Singapore offers several human resources related
measures: a Business Advisors Programme to attach experienced professionals as business ad -visors for potential high-growth SMES;
the Executive Training Programme to link talented under -graduates from Singapore universities with growth-oriented SMES;
employees and financing abroad as well as to cooperation in R&d, production and innovation activities with international partners
export shares, turnover and employment growth at the firm levelâ€. 120 The authors suggest that â€oepolicies sup
In a study for the European Commission†s Sectoral E-business Watch in 2009,42 experts responded to a
of stakeholders and experts with sectoral background and reputation. Second, its suitability for addressing advanced goals.
and job creation) to support all SMES"a little bit, "or to concentrate efforts on those with the highest growth
or failure. †144 The experts consulted for this Policy Brief took dif -ferent views.
example, the GDP or the employment level of a country grows if such policies are applied. This means that if
In Korea the SME sector, accounting for 99%of enterprises and 88%of employees, is consid
SMBA applies more than 100 SME promotion measures Recently there have been noticeable changes in Korean SME policies.
with 300 to 1, 000 employees is to be introduced for policy purposes. Korea†s SME policies
account for 99%of all enterprises and 88%of all employers. The traditional Korean policy perception of
-facturing, is an enterprise with less than 300 employees and with sales less than 8 billion won (approximately
-ment supports SMES with up to 300 employees with numerous measures, enterprises with more than 300 employees are regarded as large firms under strict government regulation
and cannot receive any support As a result, many enterprises do not grow Although the â€oeweakness concept†is still dominant,
In addition, SMBA had a SME promotion fund of 4. 3 trillion won (3. 6 billion USD),
and to increase employment, the government recently introduced several new programmes and activities ï the venture businessmen†s special lecture programmes on entrepreneurship at universities
ï improved support to spin-offs by executives and employees of large enterprises ï enabling start-ups at home and expanding the infrastructure for one-person creative enterprises
-quently SMBA has made the promotion of technologically innovative SMES one of its most important policy
The new focus is on the promotion of â€oeglobal Star SMES€ as the backbone of the economy.
employees, responding to global competition and developing initiatives to foster â€oehidden global champions†The introduction of policy schemes for supporting this group of enterprises will probably impact the Korean
Introducing a related law (Mid-sized Enterprise Promotion Act and the institutionalisation of this structural change are complicated issues and currently under discussion
or the number of employees in order to sustain the status of an SME and be applicable for government support
and 45 Executive Development Scholarships were awarded ï The Business Advisors Programme was created to attach experienced professionals, managers, ex
ï The Executive Training Programme helps SMES groom the next generation of potential business leaders by linking talented undergraduates from Singapore†s universities, with growth-oriented
MAP works with high-growth SMES to attract, develop and retain fresh talents. Targeting local university graduates,
polytechnic students to the dynamic and rewarding working environment of high-growth SMES through short term internships, co-funded by SPRING.
as much revenue and employment growth over the next three years as their counterparts which were not on
Jayaraman, joined the Asia-Pacific Executive Master of business administration Programme at the National University of Singapore through SPRING€ s Advanced Management Programme
and a critical mass of qualified technical and managerial manpower. As Rowen et al. 2006) note about the
property and new ventures, human resources headhunting, consulting and market research, and investment banking services for merger and acquisition activities.
minimum of 20 employees or to 10 million Canadian dollars (CAD) in sales or both There is currently a critical shortage of capital for technology based firms.
switched to high tech SMES with up to 500 employees (mostly under 25 employees. In Canada, in Cooper†s
more patents per employee than did larger firms In 2006 the US General Accounting Office (GAO) reported that from 1983 to 2004, participating federal
The SBIR is focused on SMES †namely over 41%of respondents had 15 or fewer employees â€, while about
15%had more than 100, for a mean of only ten employees. As expected very small firms had lower in
-creased sales and employment †with the best results for firms in the range of 15 to 25 employees.
local employment and regional development. Therefore governments should take note of this key finding. 161 In a 2010 study for CVCA Gilles Duruflã undertook a review of government assistance for firms in eight
employment safety net issues, the strategic line of discussion in 2010 gravitates around the diversification and clustering of SME business activities.
new policy systems have shifted public discussion from protection to promotion of SME business activi -ties;
-nology and information technology, employment and human resources, and financing Addressing barriers to access finance Beyond its regular annual reports, the SME Agency has been active recently in commissioning numerous
activities and increase employment in the private sector is clearly on the minds of politicians and business
of these functions through its vertical keiretsu, consisting of a layered division of labour among SME suppli
-pendent innovative capacity of SMES, then, the SME Agency pursues innovation promotion activities in two
ï Fostering employment of high-tech employees in SMES: the SME Agency introduced for the first
time in 2010 a subsidy programme for SMES employing next-generation high-tech human resources ï Fostering business transfer:
and Human resources that Generate Innovation Tokyo: commissioned by SME Agency, 2009 ï Mizuho Research Institute. 2009.
have less than 300 employees or capital below JPY 300 million. The majority of schemes target
In Israel, the main body that operates policy tools for the promotion of R&d in industry is the
Office of the Chief Scientist in the Ministry of Industry, Trade and Labour (OSC. The OSC
Chief Scientist (OCS) at the Ministry of Industry, Trade and Labour (MOIT. According to their mission
statements, the MOIT â€oefocuses on the promotion of economic growth in Israel†and the OCS â€oeoversees all
The OCS works at different levels on these issues, and manages several programmes that aim at the promotion of innovation and support of SMES
Among its activities the OCS provides access to the Eureka programme and supports the companies who
Another project that targets the promotion of innovation in SMES is initiated Magneton, also and managed by the OCS.
"MOF & MOIT formed a comprehensive programme for the promotion of high-tech industries",June 2010, at:
In all surveys of the IW Future Panel the enterprises are asked about their growth by employment and turn
of 20%or more in each of the previous three years and a size of more than nine employees at the beginning
these 59 companies had more than ten employees and thus fulfilled the OECD criteria for high-growth enter
excluding micro companies with fewer than ten employees and large companies with more than 250 em
-ternal to the company, not externally related to issues like the business cycle, consulting or public promotion
of mouth recommendation, employees, controlling, successful innovation marketing, extended distribution opportunities after being acquired by a trust (mentioned twice), withdrawal of competitors, severe winters. 167
Good coaching by external consultants Unproblematic access to growth finance Successful new marketing methods Successful introduction of new products or services
N=59 companies stating employment or turnover growth of 20%or more in each of the previous three years
10-250 employees, i e. meeting the OECD€ s definition criteria for high-growth SMES. For high-growth SMES
N=1, 451companies stating employment or turnover growth of less than 20%or no growth or even decline in the previous three years
Specific items include e g. management change, lack of skilled workers, too low distribution of risk, lack of experience with export markets
Good coaching by external consultants Unproblematic access to growth finance Successful new marketing methods Successful introduction of new products or services
N=22 companies not older than five years stating employment or turnover growth of more than 20%in each of the previous three years
The crucial argument against direct and selective promotion of high-growth SMES is Why promote those SMES that are successful anyway?
firms for employment creation also needs to be considered Considering country differences The level of difficulties in acquiring finance differs starkly between European countries (see section 4. 2. 2
-tional export promotion programmes and innovation support measures†which could also â€oeconsider the inter -actions and complementarities between national and EU level instrumentsâ€.
importance of high-growth SMES for employment in developed national economies, it appears to be worth
erable employment and welfare. Furthermore, governments should also not aspire to eliminate new venture failures. 192
However, existing evaluations and expert statements collected for this Policy Brief suggest that such policies should take a broader approach, not ex
education system, investment regulation, start-up regulation, market entry barriers, labour law, bankruptcy law, taxation, and also to SME policies rewarding to stay small.
further work towards single markets in Europe as well as enhancing the EC€ s Enterprise Europe Network
Possibly specific labour law rules for new high-growth companies Trade conditions Establish common markets and support
Ensure provisions in labour law and bank -ruptcy law conducive for high growth Economic stability Economic stability and
Employment effects of business dynamics: Mice, gazelles and ele -phants. Discussion Papers on Entrepreneurship, Growth and Public Policy;
of Education and the Ministry of Employment and the Economy: Evaluation of the Finnish National In
Ministry of Employment and the Economy (2011: Growth Enterprise Review 2011. Finnish: Kasvuyrityskat -saus 2011.
Ministry of Employment and the Economy of Finland, http://www. tem. fi/?/l=en&s=2383, last accessed May
Jonathan Potter, OECD, Senior Economist, Local Economic and Employment Development. 1 june 2010 Burton Lee, Innovarium Ventures, 17 august 2010
2008 Acs/Mueller Employment effects of business dynamics: Mice, Gazelles and Elephants Level 2 International Journal of Entrepreneurial Venturing
d) good coaching by external consultants e) unproblematic access to growth finance f) successful new marketing methods
During an intensive five-month process you will be in contact with customers and industry experts
by the Ministry of Employment and the Economy http://www. yrityssuom i. fi ***Vigo by Finnish Minis
-try of Employment and Economy â€oethe programme bridges the gap between early stage technology firms
by internationally proven entrepreneurs and executives. These Accelerators help the best and the brightest start
The Accelerators are not consultants--they are co -entrepreneurs who invest in the companies they work with.
â€) The Finnish Ministry of Employment and Econ -omy launched the Vigo Programme in 2009.
PROFICT Partners Oy manages the execution of the program. †Source: http://www. vigo. fi/program1
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