Driving open innovation in SMEs: the role of organizational and strategic dynamics

Abstract

The primary focus of this research is on Small and Medium-Sized Enterprises (SMEs) in Singapore engaged in manufacturing activities, particularly those involved in the production of technology products. Although numerous studies have explored open innovation, further research is essential to investigate the interconnected factors influencing its adoption. This study aims to examine the relationship between organizational citizenship behaviours, integrative culture, management linkages, transactional costs, and the role of appropriability regimes in shaping SMEs' inclination to adopt open innovation. Adopting a positivist paradigm, this research employs quantitative methodologies with a deductive research approach. Hypotheses were developed to explore the impact of the identified factors. Primary data were collected through a survey targeting SMEs, utilizing a Likert-scale-based questionnaire. Confirmatory Factor Analysis (CFA) was conducted to evaluate the factor structure and validate the measurement model. Subsequently, Partial Least Squares Structural Equation Modelling (PLS-SEM) was employed to assess the relationships between variables and ensure the internal consistency of the derived factors. The findings highlight the potential of open innovation practices in SMEs to enhance technological outcomes, resulting in the development of advanced, high-quality, and ecologically sustainable products and services. These practices contribute significantly to societal well-being and sustainability. Furthermore, the integration of technological innovation fosters the educational development of future management leaders, equipping them with essential skills for managing innovation in a globalized world. Establishing collaborative relationships across diverse industries promotes organizational learning and cultivates a proactive approach to innovation management, addressing critical challenges in the era of globalization.