Enhancing Innovation Capacity in SMEs through Early Network Relationships

Networks can offer SMEs a number of advantages, especially in terms of providing greater opportunities for knowledge activities that support innovation, but there is little in the literature to suggest how firms develop their innovation capacity through network participation. In this paper, we present an in‐depth longitudinal case study of a small entrepreneurial firm within the mobile‐commerce industry. A principal finding from the study is that network relationships formed during the earliest stages of the firm's life cycle played a critical role in developing the SME's capacity for sustained innovation. Further, the study contributes to network theory by calling into question the weak and strong tie dichotomy, as relationships critical to the SME's innovation capacity possessed characteristics of both types of ties. The paper also contributes to managerial practice by emphasizing the importance of establishing strong relationships in the earliest stages of network formation.     

Innovation Culture,Collaboration with External Partners and NPD Performance

Researchers and managers have found that the use of external knowledge in the process of new product development (NPD) helps to sustain a firm's competitiveness by strengthening its innovative performance. However, little is known about why some firms use external knowledge sources for NPD in an extensive manner while others hardly ever use them. In addition, there is disagreement about which external partners significantly contribute to the innovative performance of a firm as valuable knowledge sources. Based on the resource‐based view (RBV) of the firm and Kitchell's innovation adoption model, this paper expects a firm's innovation culture to have a significant impact on its openness to external knowledge – measured in terms of its collaborative behaviour with five different external partners – and for that behaviour to influence the firm's NPD performance. A sample of 254 technology‐based firms across several industries is used to empirically test the research model with covariance‐based structural equation modeling (SEM). The findings deepen our understanding of the discrepancies between successful pioneering firms active in technology and knowledge sourcing and others being less successful.     

Exploring value networks: theorising the creation and capture of value with open source software

The emergence of open source software (OSS) as a form of peer production and innovation challenges theories of organisation and strategy due to its non-reliance on traditional governance mechanisms to organise production. OSS requires firms to rethink the processes that facilitate value creation and capture. The objective of this paper is to theorise how firms create and capture value from OSS. We derive a model from extant research and refine it through the study of three inter-organisational networks. The findings reveal how a firm's ability to access a value network of complementors is crucial for effective value creation and capture. Two types of networks are evident: a high-density network of familiar partners and a low-density network of multiple, often unfamiliar, partners. Leveraging these networks depends on the level of commitment, volume of knowledge exchange and the alignment of objectives among participant firms. Effective governance is revealed as critical for creating and capturing value within both types of network; and depends on both formal and informal mechanisms.     

Antecedents of Network Capability and Their Effects on Innovation Performance: An Empirical Test of Hi‐tech Firms in China

A firm's competitive advantage can come not only from internal resources but also from inter‐firm innovation networks. This paper shows that network capabilities (i.e., network visioning capability, network constructing capability, network operating capability and network centring capability) are special skills that enable values residing in network resources. Based on a sample of 211 Chinese hi‐tech firms and by applying structural equation modelling, network capabilities are found to have a positive relationship with innovation performance. Four antecedents of network capabilities – IT maturity, openness of culture, the management system involved and experience with network activities – are also identified in the research and empirically tested. The results of this study provide a new framework that describes how networked firms can gain a competitive advantage.     

考虑知识溢出下产业集群创新网络协同知识创造决策分析

协同知识创造对于企业维持和获取竞争优势具有重要作用,但是知识外溢会对企业的竞争力造成威胁,从而使企业在创新网络协同知识创造决策时陷入两难困境.鉴于此,通过构造由一个核心企业和n个从属企业组成的创新网络在协同知识创造过程中知识投入决策Stackelberg博弈模型,引入知识内溢系数、私有知识、知识外溢损失等变量,探讨知识溢出下,网络成员的知识投入决策和知识产出分配问题.研究结果表明:核心企业与从属企业的知识投入比和知识投入总量与协同知识创造绩效和知识内溢收益之和有关,而与私有知识外溢的损失无关;集群创新网络协同知识创造机制得以运行的条件是核心企业的知识创造收益(即知识创造绩效与知识内溢收益之和)足够大;核心企业的知识投入比与其边际收益和知识内溢系数正相关,与从属企业的边际收益和知识内溢系数负相关;协同知识创造过程中从属企业会根据其边际收益和知识内溢系数按比例分配知识的投入比.     

Facilitating SME Innovation Capability through Business Networking

Innovation processes can be regarded as complex, dynamic, and a result of cumulative dynamic interaction and learning processes involving many actors. In this setting, private small‐ and medium‐sized businesses (SMEs) can be considered a key factor – as generators of new ideas, as entrepreneurs carrying out new ventures, and as partners for other local actors. This study focuses on the SME networks and their ability to participate in innovative processes directed at new value creation. We present a case study of the development of a young innovation network. Our focus in the case study is on the SME's ability to carry out innovation and new value creation in a network. The key contribution of the study centers on the new understanding of the way SME innovation could be promoted through facilitated network development.     

Collaborations with Scientific Partners: The Mediating Role of the Social Context in Fostering Innovation Performance

The success of collaboration between firms and scientific partners is still debated. Although a firm's social context seems to be crucial to explain the success or failure of such collaboration in terms of innovation performance, a deep analysis of the context role is still lacking. Therefore, the aim of this paper is to analyse whether a firm's internal climate as well as the quality of the relationships with scientific partners can mediate the relationship between collaboration and innovation performance. Results, based on survey research developed in Finland, Italy and Sweden, suggest that collaborations with scientific partners achieve good results in terms of innovation performance, through an explanation path which involves a firm's social context.     

The choice of governance mode in ICT alliances: A property rights approach

We employed a property rights approach to formulate a set of hypotheses explaining the choice between equity and non-equity alliances in the Information and Communication Technology industry. The firm's need to control knowledge exchange and the resulting innovation makes property rights an important concern permeating partners’ strategic behavior. We showed that equity alliances were preferred, when partners kept a competitive relationship and followed a diversification strategy. However, non-equity alliances were preferred, when partners exhibited high resource complementarity. Finally, our research indicated that, when alliances targeted innovation development, prior ties between partners positively affected the choice of equity alliances.     

Successful Patterns of Internal SME Characteristics Leading to High Overall Innovation Performance

Small and medium‐sized enterprises (SMEs) struggle with the paradox of developing new products and technologies on the one hand and minimizing costs on the other. These SMEs must be innovative to survive and grow. However, compared to large firms, SMEs have several problems in their innovation process, which negatively influence their overall innovation performance. This research explores successful patterns of internal SME characteristics that lead to high overall innovation performance. Cluster analyses were conducted to find patterns in the internal characteristics of SMEs with high overall innovation performance. We find that companies that focus on incremental innovation and that achieve high overall innovation performance indeed share a pattern in their internal organization, when controlling for innovation type. The paper adds to the current body of knowledge by comparing high‐ and low‐performing companies based on competence differences. Because real‐life organizations consist of multiple organizational characteristics, we also contribute to management practice by simultaneously addressing multiple organizational characteristics for the successful organization of innovation.     

Retail–collection network design under deposit–refund

This paper studies the interplay between industrial firms and government concerning the collection of used products from households. The focus is on the use of a deposit–refund requirement by the government when the collection rate voluntarily achieved by the firms is deemed insufficient. We present a continuous modeling framework for designing a drop-off facility network and determining the sales price that maximize the firm's profit under a given deposit–refund. The customers’ preferences with regards to purchasing and returning the product are incorporated via a discrete choice model with stochastic utilities. Through parametric analyses, we determine the net value that can be recovered from a returned product as a key driver for the firm to voluntarily engage in collection. We show that a minimum deposit–refund requirement would not achieve high collection rates for products with low return value and point out two complementary policy tools that can be used by the government.     

Idea generation and open innovation in SMEs: When does market‐based collaboration pay off most?

Small‐ and medium‐sized enterprises (SMEs) largely depend on proficient idea generation activities to improve their front‐end innovation performance, yet the liabilities of newness and smallness often hamper SMEs' ability to benefit from systematic idea generation. To compensate for these liabilities, many SMEs adopt an open innovation approach by collaborating with market‐based partners such as customers and suppliers. This study investigates the relationship between SMEs' systematic idea generation and front‐end performance and investigates the moderating role of market‐based partnership for SMEs. Drawing on a survey of 146 Swedish manufacturing SMEs, this study provides two key contributions. First, the systematic idea generation and front‐end performance relationship in SMEs is non‐linear. Accordingly, higher levels of front‐end performance are achieved when idea generation activities are highly systematic. Second, the returns from higher levels of systematic idea generation are positively moderated by market‐based partnerships. Thus, external cooperation with customers and suppliers pays off most toward front‐end performance when SMEs have highly systematic idea generation processes. These results indicate a contingency perspective on the role of external partnerships. They also have implications for research into the front‐end of innovation and open innovation in the context of SMEs.     

A social network analysis of interlocked directorates in electronic commerce firms

Using social network analysis, this research examines whether a pattern of interlocked directorates exists among the top 50 e-commerce firms and how this network differs from the network of other leading firms. Further, it looks at whether a firm’s measure of centrality is associated with its visibility. The results suggest that the location of e-commerce firms in these networks is more important than simply the number of ties. The findings point to the role of e-commerce firms in establishing links between both firms and industries. These findings also suggest that e-commerce firms are most interesting to study when looked at in terms of a larger network of firms, and that it is in the ties between the e-commerce and the traditional and well-established firms where many potential research opportunities lie.     

How Barriers to Collaboration Prevent Progress in Demand for Knowledge: A Dyadic Study of Small and Medium‐Sized Firms,Research and Technology Organizations and Universities

This article analyses the challenging collaboration between small and medium‐sized enterprises (SMEs) and knowledge institutions. The aim of the article is to shed light on the barriers, which hinder collaboration, and to investigate the particular role of research and technology organizations (RTOs) as potential mediators of collaboration between SMEs and universities. On the basis of a unique sample consisting of 151 SMEs, RTOs and universities from seven countries, the differences across dyads of potential collaborations are identified. In particular, the article finds that both firms and universities with collaboration experience with the other partner in general perceive higher barriers than inexperienced firms or universities. In terms of the mediating role of RTOs, the article illustrates that universities perceive lower barriers when collaborating with RTOs than with SMEs. A similar tendency to a mediating role of RTOs can be found among the SMEs' perception of university collaboration. Finally, the analysis shows that the knowledge institutions perceive the SMEs as very important collaboration partners, but the same sense of importance is not shared by the SMEs regarding collaboration with the knowledge institutions. Hence, there seems to be a quite unbalanced view on the potential of the collaborative ties, which is further discussed in the conclusion.     

Open to a Select Few? Matching Partners and Knowledge Content for Open Innovation Performance

The purpose of the paper is to illuminate the costs and benefits of crossing firm boundaries in inbound open innovation (OI) by determining the relationships among partner types, knowledge content and performance. The empirical part of the study is based on a survey of OI collaborations answered by R&D managers in 415 Italian, Finnish and Swedish firms. The results show that the depth of collaboration with different partners (academic/consultants, value chain partners, competitors and firms in other industries) is positively related to innovation performance, whereas the number of different partners and size have negative effects. The main result is that the knowledge content of the collaboration moderates the performance outcomes and the negative impact of having too many different kinds of partners. This illustrates how successful firms use selective collaboration strategies characterized by linking explorative and exploitative knowledge content to specific partners, to leverage the benefits and limit the costs of knowledge boundary crossing processes.     

SME Network Characteristics vs. Product Innovativeness: How to Achieve High Innovation Performance

Small‐ and medium‐sized enterprises (SMEs) must on the one hand innovate for company survival with the appropriate degree of product innovativeness, and on the other they need to collaborate and focus on core competences for efficiency matters. This research examines the relation of network characteristics and product innovativeness on innovation performance in SMEs. We tested hypotheses on the relationship between these three variables via data gathered from 60 SMEs, active in the medical devices sector. In this context we aim to offer consensus on the theoretical and empirical question of whether or not network characteristics and product innovativeness have a direct effect on innovation performance of SMEs. Results show no significant direct effect of product innovativeness on innovation performance. A positive interaction effect of multiple network characteristics on innovation performance was found, which confirms the significant importance of network configuration on innovation performance for SMEs. It indicates that, for SMEs in a highly regulated sector like the medical devices sector, the interaction of network characteristics is of crucial importance for high innovation performance. It is the combination of network characteristics that counts.     

Embedded (Lead) Users as Catalysts to Product Diffusion

Firms can harness social user networks not only for ideation, but also to accelerate and facilitate diffusion of new product introductions. They select individuals whose own product adoptions and opinions influence adoption decisions of others. In this paper we transfer this rationale to firm employees. We focus on ‘embedded users’ who are employees of a firm, but at the same time users of the firm's products. We aim to find out if their access to user networks, use experience and lead userness impact their opinion leadership and domain‐specific innovativeness. We also show how cognitive empathy towards external users is a mechanism to explain these relationships. Drawing on the user innovation and consumer behaviour literature, we derive and test eight hypotheses on a sample of 54 firm employees in gaming hardware firms. We find that lead userness is positively related to domain‐specific innovativeness and opinion leadership, but use experience only to the former. Cognitive empathy mediates all relationships in our study. To facilitate embedded users' tendency to act as opinion leaders and to adopt new products, managers should encourage their employees to use the firm's products to build use experience and thus develop cognitive empathy towards external users.     

Information security in networked supply chains: impact of network vulnerability and supply chain integration on incentives to invest

Recent supply chain reengineering efforts have focused on integrating firms’ production, inventory and replenishment activities with the help of communication networks. While communication networks and supply chain integration facilitate optimization of traditional supply chain functions, they also exacerbate the information security risk: communication networks propagate security breaches from one firm to another, and supply chain integration causes breach on one firm to affect other firms in the supply chain. We study the impact of network security vulnerability and supply chain integration on firms’ incentives to invest in information security. We find that even though an increase in either the degree of network vulnerability or the degree of supply chain integration increases the security risk, they have different impacts on firms’ incentives to invest in security. If the degree of supply chain integration is low, then an increase in network vulnerability induces firms to reduce, rather than increase, their security investments. A sufficiently high degree of supply chain integration alters the impact of network vulnerability into one in which firms have an incentive to increase their investments when the network vulnerability is higher. Though an increase in the degree of supply integration enhances firms’ incentives to invest in security, private provisioning for security always results in a less than socially optimal security level. A liability mechanism that makes the responsible party partially compensate for the other party’s loss induces each firm to invest at the socially optimal level. If firms choose the degree of integration, in addition to security investment, then firms may choose a higher degree of integration when they decide individually than when they decide jointly, suggesting an even greater security risk to the supply chain.     

我国核型集群创新网络的多agent仿真研究*

从分析焦点企业最终产品对创新网络的影响出发,采用多agent方法构建创新网络主体适应性模型,应用Swarm平台在现实与改良环境下对网络演化过程进行了仿真,并采用Ucinet软件对仿真结果进行绘图与分析。结果证明了此类集群创新网络复杂性随最终产品复杂性提高而提高,以及两种改良环境下演化结果远优于现实环境。说明了焦点企业最终产品系统对于集群创新网络演化过程影响重大,以及为此类集群企业提供创新融资渠道,并吸引国外企业加入本地集群势在必行。     

Open Innovation and Firm Performance: The Mediating Role of Social Capital

This article examines the role of social relations and networks in open innovation settings. Building on extant open innovation literature as well as on social capital theory, we develop a model that conceptualizes social capital as a mediator between the implementation of open innovation instruments and firm performance. In doing so, this paper adds to the understanding of the role of structure and content of social relations in open innovation contexts as well as of sustainable side‐effects of open innovation. In particular, we argue that apart from a direct effect of open innovation instruments on firm performance, there is also a mediated relationship between these variables. More precisely, we propose that the implementation of open innovation instruments strengthens an organization's social capital, which is, in turn, positively related to firm performance.     

Variety is the Spice of Innovation: Mediating Factors in the Service Idea Generation Process

To create a breakthrough service innovation, firms need to go beyond current customers' needs and tap into the needs of the future market. As marketing theory favours customer‐centric approaches, customer‐led ideation and co‐creation of innovation seem natural candidates for extracting the ‘sticky’ information nested in some of the most innovative customers' minds. Grounded in the service innovation literature, this paper extracts innovative service ideas from ordinary users (n = 388) in three different service domains and seeks to identify the salient characteristics of the most innovative customers. Past research shows that innovative users are more likely to be service defectors, frequently switching from firm to firm, and motivated by their predisposition to seek variety. Using a structural modelling strategy, variety seeking is tested as a mediating factor between the subjective knowledge level and the presence of high level unmet needs leading to the generation of innovative service ideas. The results show that variety seeking fully mediates the relationship between subjective knowledge and unmet needs. Several interpretations of the role of variety seeking on customers' behaviour are explored within the context of capturing innovative service ideas.