How open innovations can contribute in accelerating SMEs internationalization?

Jurgita Sekliuckiene, Vilius Viburys

Abstract


Due to trade liberalization in globalizing world, declining cost of transportation and significant technological innovation the competition among worldwide businesses is constantly growing. Internationalization has become one of the most important factors which determines long-term competitiveness of the enterprise (Shearmur, Doloreux, Laperriere, 2014). Various studies (Johanson and Vahlne, 2009; Casillas, 2013; Osei-Bonsu, 2014) suggests that internationalization can be defined as a learning process and must be approached as the essence of companies development. However in the process of internationalization small and medium-sized enterprises (SMEs)  encounter barriers and difficulties such as limited firm resources and international contacts, unfavourable environmental factors as well as lack of information and human resources (Khojastehpour, Johns, 2014; Sekliuckiene, 2013). Open innovations paradigm could be used seeking to reduce or entirely eliminate some of these negative factors and thus help to accelerate internationalization process in SMEs.

Purpose. The purpose of this paper is to provide theoretical implications on adopting open innovations for accelerating small and medium-sized enterprises (SMEs) internationalization.

Methodology. In this paper, two separate subjects – open innovations and internationalization processes in SMEs were reviewed by means of theoretical literature analysis based on lack of research on the association between open innovations beneficial influence on acceleration of SMEs internationalization processes. In the first phase of study a literature review on the matter of open innovation within the SMEs in particular was carried out, as well as the main internationalization problems faced by the same type of enterprises were identified. The second phase contains specific advantages of using open innovation in SMEs to streamline internationalization.

Results. Inbound open innovations could benefit to the SMEs internalization by taking external knowledge inside the company from interactions with different types of external international sources. Gained external knowledge about foreign markets reduces time-to-market and enables to conduct R&D with external partners. Whereas outbound open innovations is more about taking knowledge outside and consequently it does not directly affect internationalization of particular company, but it allows to transfer existing technological capabilities to external international organizations that are better suited to commercialize a given technology. Finally, open innovations allows to combine both inbound and outbound open innovations and by forming international strategic alliances that benefit from leverage effects through shared knowledge and integration in value chain.

The theoretical contribution. Although open innovations is well documented, this paper extends previous studies and allows to view open innovations in SMEs as a context to accelerate internationalization processes. Past theoretical material does not describe direct interactions between open innovations and internationalization in SMEs, therefore this paper serves as a framework to the future works by integrating previous findings to view open innovations from a new perspective.

Practical implications. Findings of this study propose to view open innovations as a tool to accelerate internationalization processes in SMEs and provides guidelines for researchers to test theoretical implications by performing further research.

Keywords: Open innovation, SMEs, internationalization.

Paper type: Theoretical paper.


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