Causes of Failure of Open Innovation Practices in Small- and Medium-Sized Enterprises

Abstract

The adoption of open innovation poses significant challenges that are important to explore. Studies in this field have mainly focused on exploring the causes of the failure of open innovation among large companies. This study addresses this research gap by employing a sample of 297 Portuguese small- and medium-sized enterprises (SMEs) to explore, through a quantitative study, whether the dimensions and causes of failure differ between large organizations and SMEs. A total of seven dimensions of causes of failure are considered, including strategy-related, organizational structure, organizational culture, knowledge and intellectual property management, management skill and action, resources, and interfirm collaboration. The findings reveal significant differences in four of these seven dimensions: the main causes of failure are related to the resources and management processes of open innovation in SMEs, while large companies face more challenges in the organizational structure and culture components. This study offers theoretical insights into the gaps in the literature to better understand the challenges facing open innovation. Furthermore, this study offers practical guidelines for SMEs to identify and mitigate these main obstacles, promoting better innovation management practices.