Enabling Open Innovation in Small and Medium Enterprises: A Dynamic Capabilities Approach

This paper aims at exploring the critical dynamic capabilities of small and medium enterprises (SMEs) in the innovation process and at identifying the dynamic capabilities that enable the implementation of open innovation practices. Building on qualitative data from the manufacturing industry deriving from an in-depth investigation of the capabilities of four innovative case firms, the patterns between the firm’s portfolio of dynamic capabilities and the different types of open innovation processes are mapped. This study makes three primary contributions to the body of knowledge. This is the first attempt to link dynamic capabilities to an open innovation approach undertaken by SMEs. Second, the study extends existing work on innovation in SMEs by identifying key dynamic capabilities in this context. Finally, the case-based research provides empirical evidence of dynamic capabilities in practices, where analysis reveals that companies with strong sensing, seizing and reconfiguring capabilities are more inclined to develop open innovation approaches.