Measuring Open Innovation in SMEs

Research on open innovation in firms has grown significantly over the last decade. While scholars have started to address the knowledge gaps around open innovation in small and medium-sized enterprises (SMEs), there is still much to be done to develop more systematic evidence on the open innovation practices of SMEs. Given this, and in order to develop a greater understanding of open innovation practices at the SME level, this chapter develops a methodology for capturing, measuring, and benchmarking open innovation practices of SMEs. The theoretical framework proposes and develops six composite indicators to measure the different elements of open innovation within SMEs. These six pillars of open innovation practices are knowledge and technology sourcing activities; innovation expenditure; sources of knowledge; human capital; innovation networks; and intellectual property protection. They allow the examination of this phenomenon across spatial, temporal, and firm-level dimensions. The theoretical framework proposed herein has the potential to provide useful insights on the open innovation activity of SMEs across different size, sectoral, and spatial measures. This has value for policymakers, practitioners, and academic scholars seeking to better understand the differences in open innovation activity at these levels. This can be achieved by utilizing data from Community Innovation Surveys as the main data source for measuring innovation in Europe. The harmonized nature of these surveys provides a unique opportunity for benchmarking and comparative analysis on open innovation activities of different sectors and regions utilizing the proposed framework of open innovation practices. A further impact of the methodology that we propose in this chapter is its potential integration with the annual European Innovation Scoreboard and Regional Innovation Scoreboards. Currently, such an approach is lacking from both these EU-level scoreboards.