Employing Open Innovation Where Smes Need It Most, The Indonesian Perspective

Abstract

The Indonesian SMEs is forced to face the hard and brutal competitions through the implementation of ASEAN Economics Community as one single market and free trade agreement, causing reduction of market obstacles in neighboring countries. Innovation is the key to winning over the harsh competition, whereby nowadays 'open innovation' is the key lead in companies' managerial supervision in terms of profitability and sustainable growth. This study introduces implication findings from the application of 'open innovation' on SMEs entrepreneurs as successfully proposed by Henry Chesbrough a decade ago. The evidence will be useful as an input for Government through its policy, companies' associations, and SMEs entrepreneurs themselves, in order to give useful contributions toward their business and aggregated national economy. The empirical investigation is based on a sample selection of Indonesian SMEs those were got the government grants and has collaborated already with other institution such as a university and an association. In the present of two keys external components i.e. government grants & technological development has been adopted by Indonesian SMEs, this study investigates whether R&D capacity coupled with significant Managerial Structure and Competencies were the key factors that contribute to developing the innovation capability and export performance of SMEs.