Open innovation for SMEs in developing countries – an intermediated communication network model for collaboration beyond obstacles
Petar Vrgovic
Department of Industrial Engineering and Management,
Faculty of Technical Sciences, Novi Sad University, Serbia
Brian Glassman
Innovation Strategist & Manager
Commercialization Specialist, USA
Abram Walton
Innovation Management, College of Technology & Innovation, University of South Florida Polytechnic,
Lakeland, FL, USA
Predrag Vidicki
Department of Industrial Engineering and Management,
Faculty of Technical Sciences, Novi Sad University, Serbia
Abstract
Although there is increasing interest in exploring open innovation in developing countries, the conceptual and potential applications of using open innovation in the small to medium enterprise sector are rarely explored. Since SMEs often have a dominant impact on national economies, their innovative potential should not be neglected. While SMEs in developed countries have learned how to innovate, SMEs in developing countries face a range of obstacles that hinder them from innovating as much as they could. This paper suggests that in these cases a government agency, using innovation hubs, could help SMEs to connect, communicate and collaborate with independent inventors and other parties to jumpstart innovation practices. A joint innovation model is presented to address known issues and a number of cases from developing countries are summarized to test the model.
Keywords
open innovation; collaboration; independent inventors; idea generation; communication
Article Text
Developing countries around the world are diligently examining the means of growing their local and national economies. Innovation is broadly considered to be one of available means to achieve this desired growth (Jaffe & Lerner 2006), though it stands to be the least explored one, which is partially due to the newness of this field (Gupta 2009). National innovation initiatives hold many opportunities to advance and grow a nation's economic base. The importance and applicable approaches of National Innovation Systems in transition economies and developing countries should be systematically assessed (Kitanovic 2007). These efforts towards advancing innovation at a national scale have proven to be very fruitful, being performed with a combination of macro-economic policy, venture capitalism, innovation management, and regional entrepreneurship initiatives, such as through the use of national innovation hubs (Chen & Karwan 2008; Marceau 2008; Trajtenberg 2002; Wonglimpiyarat 2005). These national innovation hubs have successfully used inventor networks and product consultant support networks.
Most current economic growth is largely a result of small and medium sized enterprises (Nieto & Santamaria 2010; Siu 2005). And, since it is known that growing small businesses have a positive impact on the country's economic wellbeing through the creation of wealth and jobs, such growth also spurs further innovation (Carter & Jones-Evans 2006). Therefore, this paper posits it is a fruitful idea to strive toward improving the innovation processes and frameworks that governments and SMEs employ in developing countries. Studies from developing countries show that innovation cooperation and interaction are becoming more and more important for SMEs to promote their innovation abilities (Biggs & Shah 2006; Liefner, Henneman & Xin 2006). However, while applying the concept of innovation hubs to small to medium size businesses in developing countries may result in the largest impact on local and national growth, this paper argues that developing countries may face significant obstacles when trying to implement innovation hubs and strategies the way developed countries did.
This paper focuses on creating a model that can help small to medium size businesses in developing countries to invent and produce new products more efficiently, by connecting them with experienced inventors and marketing research teams through intermediary help of government bodies and innovation hubs. In the literature review section, the open innovation initiatives of SMEs in developing countries will be analysed, as well as their networking preferences and factors affecting them. Also, government agencies' and other intermediary bodies' roles will be reviewed to delineate their function as mediators in developing countries. The next chapter of this paper will present the proposed model, after which, relevant data will be summarized to support the given model.
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