The Effect of External Knowledge Sources on Organizational Innovation in Small and Medium Enterprises in Germany

Abstract

Background: Firms increasingly depend on external actors for the process of generating innovation. Interaction with these actors might occur through an official collaboration agreement or via external actors as the source of information. Objectives: Although open innovation has received more attention, still less is known about its effect on organizational innovation. To fill this gap, this study investigates the impact of various external knowledge sources on the willingness of small and mediumsized enterprises to introduce organizational innovation. Methods/Approach: To achieve the proposed objective, the German Community Innovation Survey conducted in 2017 is used for the econometric analysis. Results: Different external sources of knowledge are relevant for the introduction of organizational innovation in small firms (customers in the private sector, competitors, conferences, and crowdsourcing) compared to medium-sized firms (customers in the private sector and industry associations). Conclusions: External knowledge sources are more important for small firms compared to medium firms, and those small firms are more likely to use various sets of external knowledge.

Worldwide Research on Open Innovation in SMEs

“…Cluster 5 (purple colour) is "Knowledge Transfer and Organizational Innovation". This cluster shows the role of knowledge and technology transfer in SME innovation systems [213][214][215]. This knowledge transfer involves various stakeholders, such as universities and research centres [118,207], and the support of organizational innovation in OI activities [111,216].…”

User communities: from nice-to-have to must-have

“…These firms can be either national, foreign, clients, suppliers, competitors, or even from the same group as the firm concerned, taking the value of 1 if the firm cooperated with any external firm, and 0 if otherwise. Similarly, the use of this variable is not new in studies that rely on the CIS database (e.g., see Stejskal et al, 2018;Damioli et al, 2019;Basit, 2021).…”

“…We expect this variable to positively impact innovation performance (Afzal et al, 2018;Colapinto & Porlezza, 2011;Farace & Mazzotta, 2015;Gur, 2020;Papa et al, 2018). The role of human capital in innovation performance is generally accepted by academics and commonly used as a control variable in studies using CIS data (Basit, 2021;Costa et al, 2021;Odei et al, 2021). Moreover, this variable is commonly measured through the percentage of personnel with at least undergraduate education (Afcha & Lucena, 2022).…”

“…Larger firms tend to have better access to funding, and, consequently, can have larger investments in innovation processes but not necessarily produce more innovations (Hashi & Stojčić, 2013). This variable is largely used in similar studies, as seen in Kampik and Dachs (2011), Basit (2021), and Costa et al (2021).…”

The use of financial information in the business management of SMEs in Colombia

“…SMEs represent more than 90 % of the total number of companies in the world (UN, 2021), 99 % in the European Union and 99 % in Colombia. Therefore, their importance at the economic level is unquestionable both in the generation of employment (about 70 % of the world population and about 98 % of formal employment in Colombia) (DANE, 2021), as well as in the contribution of taxes for the redistribution of wealth in society (Basit, 2021). For these reasons, this study contributes to the achievement of SDG 8 (promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all), and 9 (promote sustainable industrialization and foster innovation).…”