Open Innovation is one of the most discussed themes in managerial literature. However, there are still many questions that scholars have not yet answered. A research question of particular relevance today is: How can open innovation help small and medium-sized enterprises overcome and manage the economic crises caused by exogenous factors? In the fall of 2019, a global coronavirus pandemic (COVID-19) emerged that has damaged several sectors, in particular by weakening the economy of small and medium-sized businesses. The open challenge lies in identifying a strategic vision to respond to a massively scaled system change caused by pandemics, climate emergencies, trade wars or other exogenous factors.
This empirical study aims to presents a unique opportunity to address this gap. This study proposes a framework for the business resilience of small and medium-sized enterprises that integrates the managerial constructs of open innovation (Chesbrough, 2003c) and dynamic capabilities (Teece & Pisano, 1994) in preparing for, during and recovering from an economic crisis caused by exogenous factors. Following a mixed methods approach, a quantitative phase surveyed 6113 companies (6% response rate) and a subsequent qualitative phase interviewed 7 case-study firms. Both phases were assimilated into an abductive approach.
The research findings contribute to the knowledge on the development of open innovation and dynamic capabilities in small and medium-sized enterprises and the role they can play in an exogenous crisis. The study argues that firms rely on open innovation to survive an exogenous crisis. The possibility of sharing resources and making up for missing capabilities through collaborations proved to be a winning strategy for companies. The research claims that dynamic capabilities represent a valid support for the implementation of open innovation during a crisis. Among these, firms mainly leverage ambidexterity, absorptive capacity and technology management to enable open innovation and address a turbulent high-velocity market. The study contributes to the empirical understanding of microfoundations, which create the context for a timely reaction and for the exploitation of dynamic capabilities in enabling open innovation during a crisis.
Furthermore, the study highlights how the consequences of a crisis, including lack of resources, reduced demand and time constraints, force businesses to move towards digitalisation and open innovation. In this regard, the research underlines how an open, digital business model increases the firms’ survival chances during a crisis. Finally, the study contributes to the knowledge on how open innovation and dynamic capabilities favour the development and maintenance of competitive advantage in high-velocity markets.