Connecting strategy, open innovation and performance in SMEs

Literature in recent years has investigated the new paradigm of open innovation (OI), considering it as the use of purposive inflows and outflows of knowledge and competences to sustain processes of innovation in collaboration with other partners. Authors have analysed various aspects, such as determinants, modifications in the innovation process, impact on performance and barriers to the development of this approach. Despite this, few empirical analyses have been conducted and in particular focusing on Small and Medium Enterprises (SMEs), which have significant distinguishing features compared to large companies. The purpose of this paper is to analyse the linkages between company’s strategy, open innovation dimensions and innovation performance, focusing on SMEs. In more details, the aim is to investigate the influence of firm strategy on the level of openness adopted and then the impact of open innovation dimensions on firm performance. Finally, the influence of context-specific variables (such as firm size, technology intensity, geographical area, experience of the company and technology turbulence) on the above mentioned relations will be verified. To this extent, a survey has been conducted in the Italian manufacturing context and a database of 107 responses was obtained. The constructs of the research framework were created and validated using factor analysis; further structural equation modelling was performed in order to verify the hypothesis about the studied relations. The model obtained confirmed most of the relations hypothesised, giving useful indications on how to define competitive strategy and coherent level of open innovation in order to pursue improved firm performance.