Open innovation – Yes, or No?

Engaging in open innovation can be of high benefit for your SME and may allow you to reach objectives that are out of reach for a single company. As with globalisation SMEs need to evolve faster and more often, and the complexity of solutions and expectations of customers increases, it can provide you with the ability to innovate with sufficient pace and the multidimensional approach needed. But managing the innovation process in a way that allows to benefit from open innovation is not a trivial task. It requires the ability to balance internal management with activities in network and facilitating symbiotic relations and convergence of the external knowledge into a value for customers and a profit to your company. In any case, as a leader of an SME engaged in open innovation you should keep in mind that engaging in open innovation only makes sense for your company if it can benefit from the knowledge or other resources obtained in the scope of the collaboration; if the benefit is significantly greater than the investment made by your company, including the cost of reviling your SME-specific knowledge.

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Does it mean that your company need to generate significant financial profit by participating in the open innovation project? Not necessarily. Strategic decisions for your company should always account for your ability to engage your resources in the short and medium-term perspective, but the key focus should be on whether it contributes to achieving the company vision. As in the case of any other strategic decision, the long-term vision should guide your decisions. That can mean that you can initiate or choose to participate in open innovation projects for non-financial reasons. Examples include gaining opportunities for company learning or building your future reputation. Such benefits can be especially of high value for SMEs with limited experience in innovation. Imagine that you are in strong need of developing a new eco-friendlier way to develop your product and the future of your company depends on it, as official environmental requirements are going to change in a few months. You need quality partners with technological knowledge and experience in ….

In most cases finding the perfect partner (especially if you are on a tight time schedule due to for example competitive pressure or upcoming regulatory changes that will make your current products obsolete) is a challenge. But it is even a bigger challenge to engage a top-quality partner if you are not known in the network as a quality open innovation partner. Hence, in many cases choosing to join open innovation projects to learn, build open innovation experience and build a positive reputation as an innovation partner, can be a relevant investment in line with your innovation strategy[1] that will benefit you in a long-term by increasing your ability to build open innovation projects responding to your needs when it will be essential for your company.