Open Innovation: Reaching out to the Grass Roots through SMEs – Exploring Issues of Opportunities and Challenges to Reach Economic Sustainability

Open Innovation: Reaching out to the Grass Roots through SMEs – Exploring Issues of Opportunities and Challenges to Reach Economic Sustainability

Hakikur Rahman (Ansted University Sustainability Research Institute, Malaysia)
DOI: 10.4018/978-1-5225-0556-3.ch012
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While talking about successful entrepreneurship and value addition within an enterprise through innovation, one could realize that the innovation paradigm has been shifted from simple introduction of new ideas and products to accumulation of diversified actions, actors and agents along the process. Furthermore, when the innovation process is not being restricted within the closed nature of it, the process takes many forms during its evolution. Innovations have been seen as closed innovation or open innovation, depending on its nature of action, but contemporary world may have seen many forms of innovation, such as technological innovation, products/service innovation, process/production innovation, operational/management/organizational innovation, business model innovation or disruptive innovation, though often they are strongly interrelated. Definition of innovation has also adopted many transformations along the path, incorporating innovations within the products, process or service of an enterprise to organizational, marketing, or external entities and relations. Nature and scope of agents and actors even varies widely within the innovation dynamics, when the open innovation techniques are being applied to enterprises, designated as the small and medium enterprises (SMEs). Researching in this paradigm, one has to look for some underlying issues that should be attended through responding to research questions as the research continues. Among many of the fundamental questions on innovation advancement for SMEs development there are a few, how to acquire precise information on the flow-chart of their business operations, gain knowledge on specific parameters of their business processes, utilize existing potential capacities to extend their knowledge towards successful innovation acquisition and dissemination, and extend their knowledge platform through various capacity development initiatives. They aggregate further, when issues of opportunities and challenges are being researched along the path of SME development through open innovation. Rationale of this research is to ascertain diverse aspects of opportunities and challenges surrounding the open innovation processes, and design action plans to empower SMEs in reaching out to the grass roots communities utilizing open innovation strategies. Primary focus of this research is to enable SMEs in finding out their innovation potentiality and empower them through various capacity development initiatives. However, the specific focus will adhere to adaptable technology transfer through open innovation. Along the route to justify the research potential and validate the research hypotheses (whether this research will add any economic value or knowledge gain), this study will conduct extensive literature review on various patterns of open innovation (crowdsourcing or collaborative), investigate case studies to learn about intricate issues surrounding their operational strategies (conducted by European Commission, OECD and similar institutions) and conduct surveys among selected SMEs (email, web based, egroups) in several phases. Research design includes formulation of strategies to resolve acquired research questions; collection and recording of the evidences obtained from the literature review or case studies or surveys; processing and analyzing gathered data and their appropriate interpretations; and publication of results. Analysis will include both qualitative (descriptive and exploratory) and quantitative (inferential statistics) methods.
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The initial effort of this research was in fact to find a focus area to empower small and medium enterprises (SMEs1) through open innovation strategies. Due to the open and collaborative nature of this newly evolved concept, the primary research focus has been kept within crowdsourcing innovation2, but not limited to other collaborative innovation, though it is not easy to put a restrictive boundary between them. Being new in the research arena, on one hand the concept of open innovation has been flourished very progressively within a short span of time (Chesbrough, 2003a; Chesbrough, Vanhaverbeke & West, 2006; Gassmann, 2006), but at the same time, it has evolved through various growth patterns in diversified directions involving different factors and parameters (Christensen, Olesen & Kjaer, 2005; Chesbrough & Crowther, 2006; Dodgson, Gann & Salter, 2006; Gassmann, 2006; Vanhaverbeke, 2006; West & Gallagher, 2006). Furthermore, as this research is related to SMEs3, which are the steering factor of economic growth in the European countries, and especially in Portugal where they comprise of almost 99.9% (EC, 2008) of the entrepreneurships, the problem statements were constructed following multiple studies along this aspect, though much work towards the improvement of knowledge factors on SMEs development have not been found.

Problem statements or the main purpose of this study lies within the intrinsic definition of innovation itself. Innovation is a way of performing something new. It may refer to incremental and emergent or radical and revolutionary changes in thinking, products, process development, or organizational development. Innovation, as seen by Schumpeter (1934; 1982) incorporates way of producing new products, new methods of production, new sources of supply, opening of new markets, and new ways of organizing businesses. OECD (1992; 1996; 2005), after several adjustment has come into this argument, that innovation is the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organizational method in business practices, workplace organization or external relations.

However, other scholars and researchers in the field of innovation, has put forward definition of innovation in various formats and perspectives. Some definitions or arguments are being included below:

The creation of new ideas/processes which will lead to change in an enterprise´s economic and social potential (Drucker, 1998: 149)

This research will look into the economic and social aspect of innovation process, but at the same time look into any technology parameters that are involved within the processes.

Tidd, Bessant & Pavitt (2005) and Bessant & Tidd (2007) argued that there are four types of innovation, i.e., the innovator has four routes of innovation paths, such as product innovation (changes in the products or services [things] which an organization offers), process innovation (changes in the ways in which products or services are created and delivered), positioning innovation (changes in the context in which the products or services are introduced) and paradigm innovation (changes in the underlying mental models which outline what the organization does)4.

This research would argue that these are the areas of innovation through which innovation takes place in an enterprise.

However, in terms of the types of innovation, Darsø (2001) argued that innovation can be

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