Abstract
Manufacturing SMEs play a crucial role in the development of South Africa‟s economy and have become the primary source of job creation. It will be important to adopt an open innovation strategy in SMEs in order to sustain small businesses and overcome the problems that are affecting their long-term success and survival. Open innovation strategy provides incentive for firms to exploit creative ideas through various innovation modes. This strategy implements innovative offering, creates a new pathway to the market for technology and, shares competences across businesses in order to increase value creation and appropriation.
The purpose of the dissertation is to investigate how manufacturing SMEs in South Africa are open when it comes to innovation. The population targeted were manufacturing SMEs operating in Strijdompark/Randburg, South Africa. The research methodology adopted was a mixed method approach which is the combination of both qualitative and quantitative research. Quantitative data was collected through closed-ended questions completed by 31 managers of the SMEs, and qualitative data was collected through interviews with 6 owners or managing director of the SMEs.
The findings revealed that majority of manufacturing SMEs do not rank themselves as being very open in terms of innovation. This means that the SMEs kept their products and process development knowledge or ideas for themselves without sharing with others. Some did, however, have a few collaborative innovation partners with customers, suppliers and consultants. In addition, the results indicated that adopting open innovation strategy in SMEs assist the organisation in achieving their goals in short time and establish sustainable competitive advantage in the market. Therefore, SMEs should change their organisational structure that will allow resource sharing and encourage flexibility by empowering employees, understanding motivating factors and developing a program for rewarding innovative employees. This strategy can also be adopted in large companies.
M.Com. (Business Management)