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Open innovation in small and micro enterprises .pdf.txt

and the potential of open innovation based on Web 2. 0 technologies Keywords: small and micro firms, open innovation, Web 2. 0

JEL Classification: O32 Introduction2 In the age of globalization, complex technologies Nonaka, 2007), shortened product life cycles, and

development and application of a variety of Web 2. 0 -based information and communication technologies

Many large firms such as IBM Procter & gamble or Eli lilly have already successfully adopted the open innovation approach

already using Web 2. 0 technologies to integrate customers and external experts into their innovation

supported through new Web-based technologies might also offer benefits and advantages for SMES to

Web 2. 0 technologies and platforms and related concepts such as crowdsourcing (Howe, 2008), co -creation (Winsor, 2005), or user innovation

communities (von Hippel, 2005. Therefore, even though previous studies have made important contributions to the literature and management

practices alike, there is a need for additional work to advance the knowledge regarding open innovation

through online Web 2. 0 technologies. Our empirical analysis will address three research questions. First

analysis. Finally, this study will assess how Web 2. 0 technologies can serve as an intermediary in

technologies (ICTS) and Web 2. 0-based applica -tions. The rapid development of these technologies

Web (Terwiesch and Xu, 2008. For example Innocentive, an online innovation platform founded in 2001 by Eli lilly, shows how online technologies

on the Web can support later stages of the innovation processes, help to identify new

customer involvement, user innovation, external networking and outsourcing of R&d tools are among the most frequently applied open innovation

social technologies of the Web 2. 0 as tools to open up the innovation process of SMES (Piva et al

open source software communities on the Web can help SMES overcome financial constraints and access external competencies and valuable

potential of Web 2. 0 innovation platforms and communities to support the open innovation activities of SMES outside the special case of the

software industry 2. Empirical study 2. 1. Research method and sample. An exploratory qualitative research design was adopted to

As financial data is rarely available for SMES, we relied on the number of employees when selecting our interview partners

The interviewees were notified via phone and an appointment was made in advance in order to guarantee that the interviews could be conducted

collected data broadly categorized according to our three research questions. Within the first round of content analysis, meaningful sections of the

the data searching for significant quotations, which are presented below. Another goal of the third step

the data as well as the most important findings Next, the results are presented with meaningful statements from the interviews

outside their existing core markets and core customer segments and are confronted suddenly with new market conditions.

based on Web 2. 0 and social technologies. Many of the problem areas identified could be eased and

practices based on Web 2. 0 and social technologies Therefore, in the course of the interviews, decision

It is obvious that the Internet already plays an important role in the small and micro firms

â€oethe Internet is essential for us because it offers a huge amount of specific information that is needed to offer even better

â€oewe are trying to use the Internet in the best possible way. â€ If necessary we are also

technology and Internet trends Furthermore, the prerequisites of the surveyed firms are very good for the strategic application of new

Through using the support of Web 2. 0 technologies in applying open innovation practices information generation can be simplified and

managing Web 2. 0 based initiatives. Thereby, strong competitive thinking as well as a focus on self -interests can be an obstacle for collaborations and

detail how Web 2. 0 based technology like online idea and design contests, innovation platforms and

Harnessing the Power of the Oh-So-Social Web, MIT Sloan Management Review, 49 3), pp. 36-42

The new SME definition â€ User Guide and Model Declaration, Enterprise and Industry Publication 24.

Internet Marketing in the Internationalisation of UK SMES, Journal of Marketing Management, 13 (1-3), pp. 9-28

Crowdsourcing â€ How the Power of the Crowd is Driving the Future of Business, Crown

Crowdsourcing: How the Power of the Crowd is Driving the Future of Business, New york, The

Users of the world, unite! The challenges and opportunities of Social Media, Business Horizons, 53 (1), pp. 59-68

Determinants and archetype users of open innovation, R&d Management 39 (4), pp. 331-341 40.

Co-creation in virtual worlds: the design of the user experience, MIS Quarterly, 35 (3), pp. 773-788

41. Kozinets R. V.,Hemetsberger A. and Schau H. J. 2008. The Wisdom of Consumer Crowds:

Effects of the Internet on the marketing communication of service companies, Journal of Services Marketing, 19 (2), pp. 63-69

Facebook and value co -creation, Marketing Review, 10 (2), pp. 169-183 49. Mckinsey (2008.

Building the Web 2. 0 Enterprise 50. Morgan J. and Wang R. 2010. Tournaments for Ideas, California Management Review, 52 (2), pp. 77-97

Open Innovation in Global networks. Organization for Economic Co-operation and Development 57. Parida V.,Westerberg M. and Frishammar J. 2012.

The Internet and Foreign Market Expansion by Firms, Management International Review, 42 (2), pp. 207-221

Is Open source Software about Innovation? Collaborations with the Open source Community and Innovation Performance of Software Entrepreneurial Ventures, Journal of

Small Business Management, 50 (2), pp. 340-364 61. Plehn-Dujowich J. M. 2009. Firm size and types of innovation, Economics of Innovation & New Technology, 18

Open innovation in SMEs - Prof. Wim Vanhaverbeke.pdf.txt

ï Het gebruik van Web 2. 0 ter ondersteuning van open innovatie en collectieve creativiteit

ï The international expansion path of Bekaert, AB-Inbev and Belgacom, Priscilla Boiardi and Leo Sleuwaegen, February 2010, published in English

ï Web 2. 0 Readiness Scan ï HR Toolbox 7 Table of contents 1 Why does open innovation in SMES deserve more attention?..

has been examined in a few studies based on large quantitative databases 5 These pioneering articles have explored why SMES engage in open innovation activities,

IBM. The open innovation practices of these companies have been documented widely in the professional press. Large companies deliberately introduce open innovation practices and are

CEOÂ€ and sent an additional email with detailed information about the study. In total, we contacted 18

the growing impact of the Internet, television, and other distractions at night. LÃ¸gstrup and Schmidt

it a user-centred approach, because the customers were not able to envisage that the properties of a

problems and needs bicycle users and value chain partners â€ experience. This proactive design process guaranteed that Curana would always create extraordinary products that differed from existing

manufacturers, professional organizations, user groups, social representatives, and teaching institutions that created a totally new concept for the patient hospital room:

information systems DNA Interactif Fashion (see p 29) also illustrates how an SME can transform an industry, in this case

technologies (displays and three-dimensional scanning), the company wants to change both the physical shop and the shopping experience.

large screens as a virtual, three-dimensional model dressed in clothes from various collections that the

but the software also can make choices for the customer depending in the skeleton, weight, age,

pressure differences into a convenient tool for recording weather data, the metal cells were brought into contact with a liquid that reacts to these small differences accurately

professional and ordinary users. The liquid is used also in aviation and is designed especially so that the temperature would not affect the barometerâ€ s reading.

but it also studied the problems and needs of bicycle users and value chain partners.

however, that many professional users did not trust the barometers they used. Applications for airports, blood testing, treating lung patients,

users can fry several foods at once without mixing their flavorsâ€ no one wants their apple fritters tasting like halibut

not or only weakly related to their core business. Each firm stayed focused on its product markets and

as to why a small, innovative company should stick to its core products. First, new product markets

It had to team up with different parties to develop the two basic technologies (displays and 3d

The Strada radiator had a panel on top of the radiator that users sometimes had to remove to clean the battery

To remove this panel, most people at home used a screwdriver, which would often damage the varnish.

small pop-up device was installed now to remove the panel easily without using tools. The device was

It also was user friendly by concealing hot parts so children would not burn themselves if they were playing with it

communication systems. The small consortium used the keywords to develop a new concept of the patient room that was translated subsequently into several products

Universities, research labs, crowds of experts, lead users, and knowledge brokers are just a few examples of potential external sources of kn owledge.

and a simple user interface 84 Godwin Zwanenburg, director lead of Kitchen appliances and part of Philips Consumer Lifestyle

Philips also opened the Philips My Kitchen Web site and blogs where recipes could be added

and where people could learn inspirational ways to fry food. Finally, Philips collaborated with some snack producers, such as Mora

audiovisual tools on the Internet. Entrepreneurs and small business managers are triggered not to learn and to become more innovative by studies

10-15 minutes) of 50 to 100 interesting cases around Europe and uploading them on Youtube

machinery, equipment, and software (iv; the acquisition of external knowledge through licenses or other types of contracts (v). A companyâ€ s external knowledge acquisition is captured by calculating the average

Association for Information systems, Vol. 16,1-25-25; Shafer, M. S.,Smith, H. J. and Linder, J. C. 2005), The

The core ideas of this book are summarised in the following HBR article: Other definitions of open innovation have been provided by Johnson

as if the user is at sea level. The effective air pressure is measured not, but the air pressure in relation to 0 metres is measured.

NASCAR is one of the most-viewed professional sports in terms of television ratings in the United states. In

for Information systems Chapter 4 98 29 Chesbrough, H. 2007), Why companies should have open business models, MIT Sloan Management

three core process archetypes, R&d Management Conference RADMA, Lisbon, Portugal 30 Larsen P. and Lewis, A. 2007), How award-winning SMES manage the barriers to innovation, Creativity and

In 2006, Netflix, a major movie rental company, organized a crowdsourcing contest on the Internet. The idea

was to build a better way to recommend movies to its users than its own software.

The contest was a huge success. Three years later, the Web-based movie rental service company awarded a team of mathematicians

and computer engineers called Bellkor's Pragmatic Chaos. The group developed software that is at least 10%more accurate than Netflix's current software

Cinematch) at predicting which movies customers will like based on their past preferences. Crowdsourcing contests are also possible for smaller companies â€ although most likely in smaller, more focused

communities. Moreover, small contests can be held among employees, suppliers, and local communities of designers, engineers, and so on

Open innovation in SMEs Trends- motives and management challenges .pdf.txt

not accept responsibility for printing errors and/or other imperfections 2 Open innovation in SMES

focuses only on companies that develop open source software. Lecocq & Demil 2006) study the U s. tabletop role-playing game industry,

First of all, firms may benefit from user-initiated innovations by decreasing the need to generate and evaluate ideas or concepts, by reducing R&d and

to consider users'constrains and requirements in the design of innovation, often leads to difficulties in commercialization (Cooper and Kleinschmidt, 1995;

producer and user (Foxall and Johnston, 1987), and successful conflict resolution Newman and Noble, 1990.

More recently, firms stimulate users to co-develop products or technologies, such as in the open source software (Henkel

2004; Hienerth, 2006. This practice is also becoming fashionable in other industries such as car design, electronic games,

Henkel (2004) argues that firms (adopting open source strategies) may make their technology available to the public in order to elicit

Users in the form of economic markets inform the design of technology and may even initiate the

whether users or developers are most likely to receive the greatest economic benefit (von Hippel, 1988.

4. DATA AND METHODS 4. 1 Survey description To analyze trends, motives and management challenges related to open innovation

The population of firms was derived from a database of the Chambers of Commerce, containing data on all Dutch firms.

The data were collected in December 2005, over a period of three weeks, by means of computer assisted telephone

interviewing (CATI. All respondents were small business owners or managers and innovation decision-makers. Attempts to contact reference persons were made five

times before considering persons as non-respondents. In total 2, 230 respondents were contacted, of which 1,

customers of users. The survey data contained a summary variable indicating customer involvement, i e. a dummy coded 1

if firms used input from their customers in recent innovation processes To measure the role of employees,

The survey data allowed distinguishing between employees that belong to the R&d department and those that are coming from other

To explore patterns of open innovation among SMES we relied on cluster analysis techniques. These are sensitive to the selection of the variables used, since the

cluster analysis techniques to explore patterns of open innovation practices among SMES. Finally, we used oneway analysis of variance to validate the taxonomy

in the clustering. In general, PCA reduces the risk that single indicators dominate a cluster solution,

weighted more heavily in the clustering and thus dominate the cluster solution (Hair et al.,

We first tested if our data were suitable for a component analysis by calculating Measures of Sampling Adequacy (MSA) for the individual variables

In the cluster analysis we combined hierarchical and nonhierarchical techniques. This helps to obtain more stable and robust taxonomies (Milligan and

-hierarchicalâ€ cluster analysis, in which SMES were divided iteratively into clusters based on their distance to some initial starting points of dimension k. While some k

innovation process, involvement of users in the innovation process, involvement of non-R&d employees in the innovation process

the data did not contain enough records to provide reliable insights about respondentsâ€ motives and challenges on this topic

Focus Fit with core competencies, clear focus of firm activities Renewal Improved product development, process-/market-innovation, integration of new technologies

%and to involve user in the innovation process (61 %Many SMES believe it is necessary to use a broad set of methods to meet the ever

venturing, participation in other firms, involvement of external parties, and user 31 involvement lists corporate renewal as a reason to further pursue a specific innovation

Property rights Ownership of developed innovations, user rights when different parties cooperate Quality of partners Partner does not meet expectations,

User acceptance Adoption problems, customer requirements misjudged Customer demand Customer demand too specific, innovation appears not to fit the market

parties and users (resp. 48%and 30%.%These types of open innovation require cooperation among different organizations,

--User acceptance%--13 -Customer demand%--28 -Competent employees %--24 Commitment%--51 Idea management%--8 Other%8 3-8

User involvement goes together with problems related to property rights, adoption and too specific customer demands When involving employees,

mainly within the context of large, technology user firms (Chesbrough, 2003. In this study we have addressed this gap by analyzing open innovation practices of SMES in

The results of the cluster analysis furthermore show that there are different open innovation strategies and practices

other firms and to involve user in the innovation process. Most SMES use a broad set

lead users may play a role in the deployment of open innovation in SMES. In similar

Cluster analysis. Oxford university Press, London Fontana. R.,Geuna, A.,Matt M.,2006. Factors affecting universityâ€ industry R&d

Strategies of user-initiated product innovation Technovation 6 (1), 77-102 Franke, N.,Shah, S.,2003.

User involvement in innovation projects: toward an information processing model. Journal of Engineering and Technology

Multivariate Data Analysis. 5th ed. Prentice hall, Englewood Cliffs, NJ Henkel, J.,2004. Open source software from commercial firms â€ Tools, complements

and collective invention. Zfb-Ergã¤nzungsheft Henkel. J.,2006. Selective revealing in open innovation processes:

embedded Linux, Research Policy 35, 953â€ 969 Herstatt, C.,Von Hippel, E.,1992. From experience:

concepts via the lead user method: A case study in a"low tech"field. Journal of

The commercialization of user innovations: the development of the rodeo kayak industry. R&d Management 36,273-294

Creating a Strategic Center to Manage a Web of Partners. California Management Review 37,146-162

clustering methods Applied Psychological Measurement 11,329-354 Milligan, G. W.,Sokol, L. M.,1980. A two-stage clustering algorithm with robust

recovery characteristics. Educational and Psychological Measurement 40,755 -759 Morgan, G.,1993. Imaginization. Sage California 43

User involvement as an interaction process: A case study. Information systems Research 1, 89-113 Nalebuff, B. J.,Brandenburger A m.,1996.

Co-opetition. London: Harpercollins Prencipe, A.,2000. Breadth and depth of technological capabilities in Cops:

Cluster analysis in marketing research: review and suggestions for application, Journal of Marketing Research, 20: 134-148

electronics and software firms in southeast England. Research Policy 31, 1053â€ 1067 Rowley, T.,Behrens, D.,Krackhardt, D.,2000.

Evidence from the telecommunications equipment manufacturing industry Academy of Management Journal 49, 819â€ 835 West, J.,2003.

Melding proprietary and open source platform strategies. Research Policy 32, 1259â€ 1285 West, J.,Callagher, S.,2006.

investment in open-source software. R&d Management 36,319-331 45 The results of EIM's Research Programme on SMES and Entrepreneurship are published in the

H200814 16-10-2008 User Innovation in SMES: Incidence and Transfer to Producers H200813 30-9-2008 How Does Entrepreneurial Activity Affect the Supply of

Evidence from Global Entrepreneurship Monitor Data H200809 25-7-2008 The Entrepreneurial Adjustment Process in Disequilibrium

Open innovation in SMEs Trends, motives and management challenges.pdf.txt

fax:++41 21 693 0020 This study addresses this gap by focusing on small-and

example open source software (Henkel, 2006) or tabletop role-playing games (Lecocq and Demil, 2006. Whenever large samples of enterprises are explored,

Drawing on a database collected from 605 innovative SMES in The netherlands, we explore the incidence of and apparent trend towards open innovation.

As we draw on a survey database of 605 SMES in The netherlands, the paper also accounts

describes our data, while Section 5 analyses the incidence and trend towards open innovation, and motives and

work of Von Hippel (2005) users are regarded increasingly not as just passive adopters of innovations, but they may

Users for example regularly modify their current machines, equipment and software to better satisfy process needs, and because producers fail to provide an adequate

supply (Von Hippel, 2005. Firms may beneï t from their customersâ€ ideas and innovations by proactive market

risks, to enlarge its social networks, or to reduce costs Hoffman and Schlosser, 2001; Mohr and Spekman, 1994

data set contains information on perceived barriers to adopt open innovation practices. The open innovation

use a survey database that was collected by EIM, a Dutch institute for business and policy research.

and was implemented by means of computer-assisted telephone interviewing. Data collection was done over a 3-week period in December 2005.

To reliably identify trends only respondents with long tenure and representing enterprises that systematically innovate,

were selected. The V. van de Vrande et al.//Te survey therefore started with screening questions. Respon

guidelines for the collection of innovation data, see OECD 2005). ) Secondly, the survey asked if respondentsâ€ enter

Dutch Chambers of Commerce database. Interviewers explicitly asked for those who were responsible for innovation, i e. small business owners, general managers

the data did not contain enough records to provide reliable insights about respondentsâ€ e class

5. 3. Cluster analysis To explore the incidence of open innovation in more detail, we decided to cluster the respondents in groups of

dimensions in our data and applied cluster analytic techniques to ï nd homogeneous groups of enterprises

ï rst exploratory run demonstrated that our data were suitable for PCA (i e. MSA values all 40.57, KMO

In the cluster analysis we combined hierarchical and nonhierarchical techniques. This helps to obtain more stable and robust taxonomies (Milligan and Sokol, 1980

involve user in the innovation process (61%.%Many SMES believe it is necessary to use a broad set of methods to meet

Focus Fit with core competencies, clear focus of ï rm activities 8 â€ Innovation process

involvement of external parties and users (resp. 48%and 30%).%)These types of open innovation require cooperation

IPR Ownership of developed innovations, user rights when different parties cooperate â€ Quality of partners

User involvement goes together with problems related to property rights, adoption and too speciï c customer demands.

survey database of 605 innovative SMES in the Nether -lands, we conclude that SMES are practicing extensively

Drawing on an existing database, open innovation was operationalized along two dimensions, i e. technology exploitation (reï ecting innovation practices to organize

exploitation, our data suggests that many SMES attempt to beneï t from the initiatives and knowledge of their

This result conï rms the importance of user innovation Von Hippel, 2005) for many SMES:

Cluster analysis revealed three groups of SMES, clustering ï rms into groups with similar open innovation practices

relatively more medium-sized companies, the clustering implicitly suggests a sequence in the adoption of open

that our survey data capture the full domain of external technology exploitation and exploration Although our sample of SMES is extensive,

Manufacturers are heavy-users of innovation policies, and for â€ politicalâ€ reasons the commissioner of

Cluster analysis revealed three homogeneous groups of SMES with similar application of open innovation practices. The clusters implicitly suggest a

-variate Data analysis, ï fth ed. Prentice-hall, Englewood Cliffs, NJ Henkel, J.,2006. Selective revealing in open innovation processes:

of embedded Linux. Research Policy 35, 953â€ 969 Hoffman, W. H.,Schlosser, R.,2001. Success factors of strategic alliances

A two-stage clustering algorithm with robust recovery characteristics. Educational and Psychological Mea -surement 40, 755â€ 759

Innovation Data, third ed. OECD, Paris Prencipe, A.,2000. Breadth and depth of technological capabilities in

Cluster analysis in marketing research review and suggestions for application. Journal of Marketing Research 20, 134â€ 148

Cluster analysis Motives and challenges Discussion Conclusions Limitations Suggestions for further research Principal component analysis References

Open innovationinSMEs Trends,motives and management challenges.pdf.txt

Technovation 29 (2009) 423 m P. J R e L y Re s, H Tech