1. Open innovation activities – opportunities for agrifood supply chains

Open innovation implies the co-creation of knowledge and innovation, that is, the company’s openness to the acquisition of knowledge, technology and ideas from various participants outside the company, but also the exchange of knowledge created within the company with other actors[1]. Open innovations contribute to the continuous creation of new products and services and faster entry into the market, which is of great importance for the survival of SMEs in agro-food and bioeconomy industry, in the conditions of strong competition and fast market changes. Growing difficulty in retaining knowledge, together with the high costs associated with entirely internal development of innovation has pushed companies towards the open approach to innovation[2].

Theoretical approach

The open innovation paradigm is the result of critical thinking about “closed innovation” where companies keep their ideas and innovations within the company. Open innovation paradigm was defined in 2003 by Henry Chesbrough: “Open innovation means that valuable ideas can come from inside or outside the company and can go to market from inside or outside the company as well”[3]. Since then, scholarly awareness of open innovation enlarged exponentially, resulting in more than 5.800 publications from Web of Science (on 4th of November 2022). Researchers as well as practitioners are studying an impact of open innovation on companies performance[4]^,[5],[6],[7].

Practical approach

Moreover, collaboration between partners has been highlighted as one of the fundamental goals of sustainable development of the United Nations for 2030[8]. While the cooperation between industry and academia through open innovation activities is among the main objectives of the European Union’s research and innovation policy[9]. For example, Procter & Gamble company implemented open approach to innovation and shifted their strategy from focusing on internal investment in research and development (R&D) to more open approach with focus on collaboration and connections with external partner[10]. P&G realized that they are spending to much money on R&D, and with new approach they managed to increase their sales, boost productivity and reduce costs. Additionally, implementation of advanced technologies (for example: artificial intelligence, big data analytics, internet of things) helped company to involve their customers and suppliers in new product development process, as well as to advance their supply network. Beside large companies, SMEs could even faster and better utilize the benefits from OI activities. SMEs are focused on their specialties and are active users of numerous advanced technologies and represent attractive partners to large companies[11].

Open innovation activities

The paradigm has advanced over the years and stimulated scholars and practitioners to study OI from diverse standpoints. Chesbrough has deepened the existing knowledge by expanding the definition: “Open innovation is the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respectively”[12]. Chesbrough defined “purposive inflows of knowledge” as inbound open innovation, and acknowledged outbound open innovation activity as “outflow of knowledge”. The new shift in innovation practise has encouraged companies to open up their innovation processes. In the literature, inbound open innovation is also known as “technological exploration”, while outbound can be seen as “technological exploitation”[13].

Figure 1: Technology exploration and exploitation

Source: Van de Vrande, V., de Jong, J. P. J., Vanhaverbeke, W., and de Rochemont, M. (2009). Open innovation in SMEs: Trends, motives and management challenges. Technovation, 29(6-7), 423–437, p. 424-425.

Opportunities and challenges in agri-food value chain

Although the activities of open innovation were firstly studied in large companies [14]^,[15], the importance of implementation of OI in SMEs as well as the benefits has been confirmed [16]^,[17]. Moreover, the authors concluded how unlike large companies, SMEs are motivated to use diverse sets of OI practices[18]. Additionally, it was highlighted how SMEs plays an important role in innovation[19]. SMEs differs from large companies from the limitation perspective. Lack of resources can represent obstacle for SME but also encourage companies to further look for the knowledge outside their own boundaries. On the positive side, SMEs are more flexible in decision making process and can adopt more quicker to new market changes.

Rapid technological changes and globalization also changed the agrifood supply chains and encourage SMEs to update their technology. Small agrifood companies are fiting against large supermarkets, but on the other hand SMEs are more flexible, more agile and can make decisions faster. Agrifood SMEs also need to make sure that their products are high quality and safe. There is a great opportunity for SMEs to collaborate with different partners, for example, customers, suppliers, other companies, competitors, research institutes or startups. Collaboration with startups could result in new ideas for business, since startups usually have younger employees, additionally, collaboration could reduce risk and costs. Open innovation activities could be beneficial by boost creativity in SME, and  improving competitive position. SMEs should analyze what type of partner and what strategy could be most beneficial, but they are encouraged to create open innovation ecosystem in order to extend value for their businesses.