Role of Entrepreneurs in Managing Open Innovation in SMEs

Abstract

It is nowadays quite logical for SMEs to engage in open innovation activities to combat the internal and external challenges they are facing such as fewer sources for R&D, limited financial resources and technical capabilities, lack of production facilities and distribution channels etc. Studies show that open innovation experienced a rapid increase in recent years. Recently researchers have also shown keen interest in research on SMEs whereas previously only the large companies remained focus of the academicians. The objective of the thesis is to highlight how SMEs overcome their scarcity of resources by engaging into open innovation activities. The study analyses the crucial role of the SME entrepreneur in successfully organizing and managing open innovation activities. Two SMEs from different regions, namely Pakistan and the UK, were selected as research cases for the investigation. Interviews have been used as a primary means of data collection. Our findings indicate that entrepreneurs based on their individual traits recognized the value of the opportunity and articulate the idea into a successful product. Their most important entrepreneurial characteristics are rapid decision making, risk taking capability and creativity in finding solutions to problems. The outcome of this research shows that the success of how an entrepreneur manages the business is not just based on his skills and capabilities, but it also depends on the type of innovative processes he incorporates within the organization.