Many large firms such as IBM Procter & gamble or Eli lilly have already successfully adopted the open innovation approach
open source software communities on the Web can help SMES overcome financial constraints and access external competencies and valuable
software industry 2. Empirical study 2. 1. Research method and sample. An exploratory qualitative research design was adopted to
outside their existing core markets and core customer segments and are confronted suddenly with new market conditions.
Co-creation in virtual worlds: the design of the user experience, MIS Quarterly, 35 (3), pp. 773-788
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
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
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,
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
machinery, equipment, and software (iv; the acquisition of external knowledge through licenses or other types of contracts (v). A company†s external knowledge acquisition is captured by calculating the average
The core ideas of this book are summarised in the following HBR article: Other definitions of open innovation have been provided by Johnson
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
was to build a better way to recommend movies to its users than its own software.
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 †although most likely in smaller, more focused
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,
such as in the open source software (Henkel 2004; Hienerth, 2006. This practice is also becoming fashionable in other industries
Henkel (2004) argues that firms (adopting open source strategies) may make their technology available to the public in order to elicit
2005, over a period of three weeks, by means of computer assisted telephone interviewing (CATI.
Focus Fit with core competencies, clear focus of firm activities Renewal Improved product development, process-/market-innovation, integration of new technologies
Open source software from commercial firms †Tools, complements and collective invention. Zfb-Ergã¤nzungsheft Henkel.
embedded Linux, Research Policy 35, 953†969 Herstatt, C.,Von Hippel, E.,1992. From experience:
electronics and software firms in southeast England. Research Policy 31, 1053†1067 Rowley, T.,Behrens, D.,Krackhardt, D.,2000.
Melding proprietary and open source platform strategies. Research Policy 32, 1259†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
Evidence from Global Entrepreneurship Monitor Data H200809 25-7-2008 The Entrepreneurial Adjustment Process in Disequilibrium
example open source software (Henkel, 2006) or tabletop role-playing games (Lecocq and Demil, 2006. Whenever large samples of enterprises are explored,
machines, equipment and software to better satisfy process needs, and because producers fail to provide an adequate
and was implemented by means of computer-assisted telephone interviewing. Data collection was done over a 3-week period in December 2005.
Focus Fit with core competencies, clear focus of ï rm activities 8 †Innovation process
of embedded Linux. Research Policy 35, 953†969 Hoffman, W. H.,Schlosser, R.,2001. Success factors of strategic alliances
example open source software (Henkel, 2006) or tabletop role-playing games (Lecocq and Demil, 2006. Whenever large samples of enterprises are explored,
machines, equipment and software to better satisfy process needs, and because producers fail to provide an adequate
and was implemented by means of computer-assisted telephone interviewing. Data collection was done over a 3-week period in December 2005.
Focus Fit with core competencies, clear focus of ï rm activities 8 †Innovation process
of embedded Linux. Research Policy 35, 953†969 Hoffman, W. H.,Schlosser, R.,2001. Success factors of strategic alliances
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
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,
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
machinery, equipment, and software (iv; the acquisition of external knowledge through licenses or other types of contracts (v). A company†s external knowledge acquisition is captured by calculating the average
The core ideas of this book are summarised in the following HBR article: Other definitions of open innovation have been provided by Johnson
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
was to build a better way to recommend movies to its users than its own software.
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 †although most likely in smaller, more focused
In the two categories of IT hardware and software, there were a few European companies that spent more than â 1 billion on R&d in the year 2004
In the IT hardware category, just four companies from Finland (Nokia), Sweden (Ericcson), France Alcatel) and Germany (Infineon Technologies) are
recorded against six in the USA (Intel, HP, Cisco Motorola, Texas instruments and Sun) and four in
Japan (Hitachi, Toshiba, NEC and Fujitsu. 1 The situ -ation is even worse in software and computer ser
-vices. SAP was the only European company spending more than â 1 billion for R&d, while Microsoft, IBM
and Oracle combined spent ten times that amount. In addition, there were 26 companies from the USA and
three from Japan spending more than â 100 million against only six in Europe. The 2010 Scoreboard
In the software sector there are 14 US companies and six from Europe (SAP UBISOFT Entertainment, Dassault systemes, Sage
Amdocs and Invensys). There are few European companies who are not only in the top list of software
producers, but also in the wave of internet-related in -novators, or in the small group of successful startups
champions, such as Bull in France, Olivetti in Italy Siemens nixdorf in Germany, or ICL in the UK, are
relevant for some subsectors of IT, such as software but are clearly a crucial indicator for hardware
-related sectors. The Key Figures 2007 Report, using data from the European Patent office, stated that
1) computers and automated business equipment,(2) microorganisms and genetic engineering,(3) lasers, and (4) semi
class computer and automated business equipment the share of the EU-27 (the current 27 members of
fields such as †pharmaceuticalsâ€, †computers office machineryâ€, †telecommunications†and †electronics†than in medium technology fields
long-run market shares in international trade for core ICT hardware, including computers and peripherals semiconductors, and telecommunications equipment
Europe declined from 63%in 1961 to 41%in 1994 while in the same period Japan rose from 4%to
The EU has some excellent software companies with strong positions in their subsectors or niches †there are just too few compared to the
management software for smaller businesses European commission, 2010: 37 In addition, Europe is relatively strong in embedded
software, particularly in real-time applications for industrial automation, thanks to its leadership in the fields of mechanical and electrical engineering
However, this software is sold not typically sepa -rately from the equipment. Again, the reasons be
largest effect were computer and office equipment and electronic components. In addition, these sectors showed the largest spillover effects to other indus
The case of Microsoft in operating systems is an ob -vious example. Not surprisingly, in mobile phone
products in software. According to this interpreta -tion, European software companies would be global -ly competitive,
but they specialize in customised software products, which require adaptation to the customer and the use of national languages.
In addi -tion, European markets are fragmented still in terms of regulation (particularly in services), standardiza -tion and professional practices, creating obstacles to
-search in the underlying fields, particularly computer science, and industrial competitiveness. We will use original evidence, admittedly of preliminary type, to
small panel of scientific authorities in computer sci -ence, in both European and US universities, to list
Luckily, computer science and the computer in -dustry have been the object of a massive historical literature, that has highlighted several key factors
companies such as IBM (Flamm, 1988; Chandler 1990; Langlois, 1992; Mowery, 1996; Langlois and Steinmuller, 1999.
growth of the US computer industry. Universi -ties were important sites for applied, as well as basic, research in hardware and software and
contributed to the development of new hard -ware. (â€) By virtue of their relatively †openâ€
that, IBM had developed the automatic sequence -controlled calculator (ASCC), known as Mark I which was still an electromechanical machine.
-tween IBM and the University of Harvard, which was established in 1939 (Moreau, 1984 Interestingly, as early as in 1946 the Moore
IBM hired Von neumann as a consultant in January 1952 and started a collaboration with his organiza
-15 computer, based on Harry Huskey†s 1953 design at Wayne State university, Detroit, MI. Thus in the ear
-ly days of the computer industry we witness many universities building their own machines, based on Von neumann or Turing architectures
commercial move by IBM. In 1954 IBM delivered the 650, a machine that was installed mainly for
business purposes in a thousand companies. Thomas Watson Jr decided that a university could benefit from a discount up to 60%on the price of the 650 if
-ing the computer. Soon after WWII, the University European competitiveness: IT and long-term scientific performance
Technology (MIT) worked on magnetic core memo -ries (Pugh, 1984; Wildes and Lindgren, 1985. Bas
John Backus at IBM in 1954 (Pugh, 1995), the APT language for the control of machine tools was devel
by a group of universities and computer users which held a meeting at the Computation Center of the
-ment of the software industry. In December 1968 IBM was forced by the US authorities to unbundle
the commercialization of software from sales of hardware products, giving origin to a separate indus
-try, which then propagated in several application ar -eas (Mowery, 1996. In many cases the development
of software was the product of a large-scale entre -preneurial effort, carried out by thousands of indi
-vidual programmers. As Campbell-Kelly (2003 209) puts it In the late 1970s, a typical software development
firm consisted of one or two programmers with strong technical skills but no manufacturing marketing or distribution capabilities
This trend was reinforced after the emergence of the personal computer (PC) in the 1980s, but also in the
huge growth of the videogame industry and of soft -ware applications after the internet revolution.
The creative skills of small firms were commercially ex -ploited by larger firms, or the former were acquired
or disappeared. Universities did not play a direct sci -entific role in this massive bottom-up effort, but
In the software industry, most of the R&d is done by youthful programmers, usually not
trained past the bachelor†s degree level, who crank out code in an intuitive but effective
Programmers do not necessarily come from postgrad -uate studies at universities, but benefit from an envi
-tion of computers, while after the emergence of a dedicated computer industry they were rather com
-mitted to fundamental research, education, scientific advice and consultancy Historical evidence on the role of the
promising start with the computer industry and built up foundations that could evolve into industrial competitiveness.
Indeed, the origins of the computer technology are to be found in 20th century European science, particularly in the work of two intellectual
computer, the universal Turing machine (Davis 2000). ) He had visited Princeton in 1936, where he met the great logician Alonzo Church and von
-program computer, conformed to the Von neumann architecture, was completed and labelled the Man -chester automatic digital machine (MADM)( Lav
automatic computer (EDSAC) was realized at Cambridge. Here Maurice Wilkes developed ideas that prepared for high-level programming languages
years of the computer era the UK was head-to-head with the USA. Ironically, as Moreau notes
A commercial computer, known as LEO was installed at a company in 1951, well before ENIAC (Campbell-Kelly, 1989;
In France the theoretical roots of computer sci -ence were laid down as early as the 1930s.
use ferrite-core memories. According to Mounier -Kuhn, 1994: 214 †in 1960 Compagnie des Machines Bull was
IBM. Unfortunately, although highly innovative, the machine had several problems that would have re -quired substantive development,
computers started with the pioneering work of Konrad Zuse well before WWII. Zuse started his
software were established by academic groups in the 1940s and early 1950s. These included: the Plankalkã l of Zuse in 1945, the work of Rutishauer
-ty, IBM and the Bell laboratories in the USA Williams, 2000. In the early history of computing
and large computer manufacturers emerged. How -ever, a sharp difference seems to emerge between the evolution of the technology in the USA and
software code in order to test their results. This is fa -cilitated by the fact that the test of theories can be
-tion on a hardware without losing the relevant aspects of the description. For example, it is possible to de
-couple the program from the underlying hardware representation (Shaw, 2004. This is sharply different from what happens in most areas of engineering (as
theoretical computer scientist summarized The computer originated in the academic envi -ronment. Zuse and IBM are special cases.
From the Moore School and the University of Iowa from Aiken and Wilkes to Algol, the vast
majority of the essential steps were achieved on academic grounds. Neither the car nor the air
computer has an essential abstract side, most visible in programming, and abstract automati -zation is at least not a usual industrial subject
Computer scientists imagined †packets†of information flowing through pipes, and they symbolically) worked out the consequences of
nature of computer programs made it possible to ex -plore hundreds of different directions at relatively low
The abstract nature of computer objects (e g. data procedures) allowed a process of progressive trans
An analysis of the CVS of top computer scientists An interesting perspective is to look at the large
community of computer scientists and at their own self-validation processes. Citations to papers in computer science are recorded automatically by
Table 2. Distribution of degrees of top computer scientists by geographical area Area Phd degree Master degree Bachelor degree
Where do top computer scientists come from, in terms of disciplinary affiliations? The data do not al
This is roughly confirmed for computer science (79.4%on the diagonal cell) but not for mathematics and engineering
Mathematics Engineering Computer science Other disciplines No Phd Total Number%Number%Number%Number%Number%Number
produce complete software and mention it in their CVS. In this case, on average four programs are
Software 204 1 56 4. 14 6. 081 Patents 137 1 47 6. 57 8. 342
For a large industry such as the computer industry an overall ecology of abstract ideas, engineering capabilities, technical skills, and entrepreneurial vi
software development and patents Computer science has been based on a fierce competition for students and researchers worldwide
computer scientists and increasingly have also be -come less attractive for students. Among well -reputed old European universities, just a few have
-vations of the PC (in the 1980s) and the internet (in the 1990s) were introduced, the US system already
waves of IT associated to the PC and the internet ex -actly because they had experienced already the early
A computer pioneer†s talk: 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 Norberg (eds..Berlin: Springer Becchetti, L 2001.
The determinants of suboptimal technological development in the system company†component producers†relationship. International Journal of Industrial Organisation
Computer Designers. Memphis, TN: Books LLC (extracts from Wikipedia Books LLC 2010b. German Computer scientists. Memphis, TN
Books LLC (extracts from Wikipedia Bresnahan, T F and M Trajtenberg 1995. General purpose tech
A History of the Software Industry. Cambridge MA: MIT Press Campbell-Kelly, M and W Aspray 2004.
Computer. A History of the Information Machine. Cambridge, MA: Westview Press Cantwell, J and G D Santangelo 2003.
the evolution of the German software and biotechnology indus -tries. Industry and Innovation, 6 (1), 5†24.
-ley Park†s Codebreaking Computers. Oxford, UK: Oxford University Press Crescenzi, R, A Rodriguez-Pose and M Storper 2007.
of the Computer. New york, Norton and Company Dummer, G W A 1997. Electronic Inventions and Discoveries
Creating the Computer: Government, Industry and High technology. WASHINGTON DC: Brookings Institution Freiberger, P and M Swaine 1984.
of the Personal computer. New york, Mcgraw hill Hultã N s and B MÃ lleryd 2003. Entrepreneurs, innovations and
Early British Computers. Manchester, UK Manchester University Press Lavington, S 1980b. Computer development at Manchester Uni
-versity. In A History of Computing in the Twentieth Century. A Collection of Essays, N Metropolis, J Howlett and G Rota
Heroes of the Computer Revolution. New York, Doubleday Lowen, R 1997. Creating the Cold war University.
The Computer Comes Of age. The People, the Hardware, and the Software. Cambridge, MA: MIT Press
Mounier-Kuhn, P E 1994. French computer manufacturers and the component industry, 1952†1972. History and Technology
11 (2), 195†216 Mowery, D (ed.)1996. The International Computer Software Industry. Oxford, UK:
Oxford university Press Mowery, D c and N Rosenberg 1998. Paths of Innovation. Tech -nological Change in 20th century America.
Computers and Commerce. A Study of Tech -nology and Management at Eckert-Mauchly Computer Com
-pany, Engineering Research Associates, and Remington Rand, 1946†1957. Cambridge, MA: MIT Press Norberg, A l and J E O†Neill 1996.
Transforming Computer Tech -nology. Information Processing for the Pentagon, 1962†1986 Baltimore, MD: Johns hopkins university Press
A heterogeneous dynamic panel ap -proach. Economica, 72 (No 288), 615†633 Peterson, L and D Clark 2004.
leading to IBM System/360. Cambridge, MA: MIT Press Pugh, E 1995. Building IBM: Shaping an Industry and its Tech
-nology. Cambridge, MA: MIT Press Randell, B 1980. The COLOSSUS. In A History of Computing in
In The First Computers. History and Architec -tures, R Rojas and U Hashagen (eds..Cambridge, MA:
Computers. The Life story of a Technology. Westport, CT: Greenwood Press Ten Raa, T and E N Wolff 2000.
My life at IBM and Beyond New york: Bantam Wildavsky, B 2010. The Great Brain Race.
on the first generation of computers. In The First Computers History and Architectures, R Rojas and U Hashagen (eds
Cambridge, MA: MIT Press Wirth, N 1996. Recollections about the development of Pascal. In History of Programming languages-II, T J Bergin and R G
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6 Findings about company (non-)growth from the IW Future Panel...81 6. 1 Methodological explanations...
Questions about (non-)growth in IW Future Panel...106 Annex 3: Worldwide policy initiatives for high-growth SMES...
Findings from the IW Future Panel According to the IW Future Panel, a survey of sev
-eral thousand German enterprises, the single most important reason for growth stated by high-growth
For example, while the US are home to companies such as Google, Microsoft and Ama -zon which are all fairly young
in order to become the Googles, Microsofts or Amazons of tomorrow. The Euro -pean Commission†s â€oeinnovation Union†Communication of October 2010, one of seven flagships of the
This panel includes several thousand German companies that replied to a written questionnaire providing information about their
Bruegel report are founded Microsoft 1975, the US€ fourth largest R&d spender), Amgen (1980, tenth largest in R&d) and Cisco (1984, 12th in R&d.
Companies like Microsoft, Genetech, Google and Facebook not only grew rapidly but also stimu -28 For recent studies on the issue of determinants of firm growth see Moreno/Casillas (2008;
A population survey of the Global Entrepreneurship Monitor 2010 in 21 innovation-oriented countries asked whether starting a company is considered an attractive professional option and whether successful
The core of the team is made up of the account manager from the regional office in charge and an advisor
from the IW Future Panel do however not confirm the importance of coaching for growth. 85
core technology becomes obsolete within a few years. Management often does not understand how to make
Furthermore, findings from the IW Future Panel (see Section 6. 2) indicate that difficult access to finance is not a primary reason for non-growth of companies at least in
the operational level, the European commission established a permanent SME Finance Forum to monitor 98 Murray/Hyytinen/Maula (2009), p. 153
Brief. 124 Finally, findings from the IW Future Panel (see Section 6. 2 of this Policy Brief) support the impor
-ios about the combined effectiveness of general SME policy and high-growth SME policy. In any case, such
to run core and expanding operations of the company. EIP seeks to expose local university and
service firms that assist start-ups in outsourcing their non-core work plays a significant role in the growth of
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.
-lapsed from a peak of 5. 9 billion CAD placed in 2000 to just over 1 billion CAD in each of the past three
-lion CAD in 2009 to 300 million in 2010.154 Description of Canadian capital Financing Market Business Angels:
According to the Canadian Angel Investment Network their members are currently investing over CAD 3 bil
VC investments by the VC community in Canada have decreased from a peak of CAD 5. 9
billion dollars in 2000 to just over CAD one billion dollars for each of the past three years (2008-2010.
over CAD 5 million dollars over 75%of the funds come from foreign sources. However, the total foreign
sources have dropped from 41%in 2007 to 26%in 2008 with CAD 549 million dollars to only 22%of the
CAD 334 million dollars in 2nd quarter 2009. In the federal budget 2010, the regulatory requirement for for
venture capital (CAD 18 billion dollars) between 1995 and 2005 showed much higher levels of gazelles crea
%For firms (193) known to have received VC funding CAD 1. 6 billion dollars including the
as communication, biotech, software, new materials. An evaluation of Magneton found that most of the pro
6 Findings about company (non-)growth from the IW Future Panel 6. 1 Methodological explanations
About the IW Future Panel A specific set of questions about reasons for growth and non-growth of SMES, commissioned by the INNO
-Grips, was included in the 16th wave of the IW-Zukunftspanel (IW Future Panel) of IW Consult, the consulting
Companies in the IW Future Panel are more innovative and more export-oriented than the av
In all surveys of the IW Future Panel the enterprises are asked about their growth by employment and turn
Reasons for high growth of companies in the IW Future Panel 31 49 71 0
Reasons for non-growth of companies in the IW Future Panel 39 10 4 0
Reasons for growth of young high-growth enterprises (â€oegazellesâ€) in the IW Future Panel 23
these factors and their interplay are difficult to monitor, policies favouring specific types of companies are
Global Entrepreneurship Monitor 2007 Global Report on High-Growth Entrepreneur -ship. GERA: London. Available at http://www. gemconsortium. org/download. asp?
Questions about (non-)growth in IW Future Panel The following questions were included in the IW Zukunftspanel (IW Future Panel) in spring 2011.194
Note: The interviewees filled in the questionnaire online; no computer-assisted telephone interviews Nr. Basis Question/Information Answers
1<Filter for companies growing 20%or more in each of the previous three years
http://www. oseo. fr/os eo/oseo in english2 **Ireland High Potential Start-up (HPSU Funding by Enter
Overtext Web Module V3.0 Alpha
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