The Role of Open Innovation in Eastern European SMEs: The Case of Hungary and Romania

Abstract

In response to calls in the Open Innovation (OI) literature, this paper aims to create a better understanding of the role of OI practices in the innovation efforts of Small- and Medium-sized Enterprises (SMEs) located in Hungary and Romania. Specifically, the paper analyses the role of OI in these small firms' new product/service development efforts, explores the types of OI partners they engage with, and examines the drawbacks/advantages of OI as these firms perceive them. Existing research on developing economies has shown that SMEs typically act as catalysts of economic growth and the scarce literature on OI in SMEs indicates that small firms engaging in OI practices are more innovative and competitively stronger than their counterparts that do not practise OI. Hence, it is important to study the cases of Hungary and Romania to gain insight into the effective use of OI by SMEs located in these countries.