Why Open Innovation is Not for Small Companies

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This blog post was first published more than two years ago. I decided to re-post it because the topic is still relevant and because of the value in the many great comments that my fairly provocative thoughts generated. If you want to read more about open innovation between big and small companies, you should take a look at my on book on this topic: Making Open Innovation Work. It is free of charge : – )

Back to the post…

It is difficult to find good cases on how smaller companies have engaged with open innovation. It is also difficult to give strong advice on how such companies should engage with open innovation.

I have reflected much on this and I am approaching a conclusion that is slightly provocative: Open innovation is for big companies; not small companies.

Let me provide some reasons for this:

• Small companies are most often based on one product, service, technology or platform. They are bound to find partners around this in order to prosper let alone survive. This is, however, not open innovation in my mind. This is simply entrepreneurship.

• Small companies are not big enough to engage with open innovation, which I view as more of a mindset in which they innovate across many types of innovation and business functions. They just don’t have the organizational infrastructure – and need – to engage with open innovation.

• Small companies have a role to play in open innovation ecosystems, but they get the backseat. The big companies take the driver’s seat. In open innovation, companies either control the projects or they contribute to them. Big companies prefer projects where they are in control whereas smaller companies do not even get a choice unless they have something unique that allows them to run an ecosystem.

These are just some of my reflections on an important topic. It would be great to hear your views on this and also on how you would suggest small companies should embrace open innovation. That would be interesting for a follow-up post on this topic.

Republished with author's permission from original post.

Stefan Lindegaard
Stefan is an author, speaker, facilitator and consultant focusing on open innovation, social media tools and intrapreneurship.

1 COMMENT

  1. As a CEO of FIMECC Ltd, which is an open innovation company, I do not fully agree with this view. We have 109 companies participating in our activities, and 58 out of them are SMEs. The share of SMEs measured by activity volume is 14 per cent.

    I recognize the challenges described, but they can be tackled by efficient and transparent managerial system and activity rules, by network-oriented leadership, and by focusing the activities to areas where the big need the small ones and vice versa. A specific benefit for SMEs in R&D, for example, is that they get a direct connection to the top scientists in the universities, which has traditionally been large companies’ advantage only.

    In the Future, I believe that most of the work will be digitally performed and there is less and less need to belong to any organization. More and more people will gather a team for a purpose and work like a project. Meaningful things will be carried out, no matter where the motivated people come from. I strongly believe in open innovation, and there is place for all kinds of actors.

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