Open innovation has an important impact on the innovative activity and competitiveness of SMEs. Moreover, it is a topic of interest for academics and practitioners. This study analyzes, in the context of SMEs, how absorptive capacity can favor incoming and outgoing open innovation practices, the mediating role that innovation strategy plays in this relationship, and the effect of open innovation practices on performance. Partial least squares (PLS-SEM) and empirical data obtained from interviews with 194 managers of Chilean manufacturing SMEs with between 10 and 250 employees were used. The results obtained make a relevant contribution to the literature in two aspects: (1) absorptive capacity has a significant and positive influence on firms' strategies and outbound innovation practices and (2) firm strategies play a complete mediating role between absorptive capacity and inbound open innovation practices and a complementary mediating role between absorptive capacity and outbound open innovation practices. Additionally, the results show that open innvoation improves SME performance. These results have important theoretical and practical implications for both policy makers and SME managers.
Open innovation has an important impact on innovative activity in SMEs, and can be a driving force for national and regional economic growth (Tsai et al., 2022). In addition, it is a topic of great interest to academics and practitioners. Open innovation is a strategy for companies to innovate by exploiting their own knowledge and exploring the knowledge of their environment (Chesbrough, 2006a).
Rapid technological change has radically transformed the way companies innovate and has demonstrated the need in knowledge markets to collaborate and co-create (Sengupta and Sena, 2020). OI has had a relevant impact on innovative practices, increasing business performance and innovation through incoming and outgoing flows of knowledge (Radziwon and Bogers, 2019; Leckel et al., 2020; Rogo et al., 2014; Avalos-Quispe and Hernández-Simón, 2019; Molina Sánchez et al., 2022). For SMEs, the OI model can be a way of overcoming their resource and capacity limitations and promoting the development of new products (Kapetaniou and Lee, 2018) to face the challenges of a dynamic market (Hung et al., 2011). However, the open innovation efforts of small and medium-sized businesses must be longterm in nature if they are to be successful (Radziwon and Bogers, 2019) and thus increase their competitive advantages over their rivals (Singh et al., 2019; Yun et al., 2022).
There is a wealth of empirical research regarding the causes of OI (Stanisławski, 2020). However, few studies have analyzed their impact on open innovation activities. Successful open innovation requires that the SME has the necessary capabilities to carry out these activities and that they are integrated into the framework of the company's innovation strategy. A critical determinant of OI is a company’s absorptive capacity (Jasimuddin and Naqshbandi, 2019). Combining internal information exchanges with fresh external sources of knowledge, absorptive capacity encourages innovation (Ritala and Hurmelinna‐Laukkanen, 2013). Absorptive capacity is a dynamic key to successful OI in SMEs (Yun et al., 2018; Idrissi and Castonguay, 2019), and it boosts business performance, contributing to improving company competitiveness (De Zubielqui et al., 2016). Absorptive capacity is a key element in a company’s innovation strategy design (Müller et al., 2020). The combination of absorptive capacity and innovation strategy reinforces open innovation activities (Barham et al., 2020).
In the context of SMEs, the purpose of this study was to investigate how absorptive capacity can encourage inbound and outbound open innovation practices, the role that innovation strategy plays as a mediator in this relationship, and the impact that this relationship has on performance. To do this, we surveyed 194 manufacturing SME's in the Metropolitan Region of Chile. The findings demonstrate a positive correlation between absorptive capacity and inbound and outbound open innovation activities. These results are consistent with those found in other studies (Spithoven et al., 2010). The innovation strategy approach mediates between absorptive capability and open innovation techniques. Innovation strategy is a total mediator between absorptive capacity and inbound practices, and it is a complementary mediator in outbound activities.
This study has significant managerial and public policy consequences (Yun and Liu, 2019). The results indicate, from the perspective of SME management, that managers and owners of SMEs exhibit the following traits: (1) that companies with adequate absorptive capacity can better evaluate their surroundings with new technologies and add new external knowledge to their innovation processes (Ahn et al., 2016; Agostini et al., 2017). They can better develop their inbound open innovation practices (Lu et al., 2020b) and increase the creation of new businesses (Naqshbandi and Tabche, 2018); (2) the importance absorptive capacity has in developing an innovation strategy and finding new business models (Müller et al., 2020); (3) that innovation strategy helps open companies to their external environments (Barham et al., 2020) and helps develop better open innovation practices (Crema et al., 2014). Moreover, OI is a valuable innovation strategy to increase companies’ competitive advantages (Brunswicker and Ehrenmann, 2013; Natalicchio et al., 2017). From the public policy perspective, this study provides relevant information for decision-makers. OI is a valuable innovation strategy to increase competitive advantages (Brunswicker and Ehrenmann, 2013; Natalicchio et al., 2017).