Innovation Hubs; a new form for Open Innovation in SMEs

Purpose: The impact of innovation on national economic growth is a widely recognized. Economic growth and job creation activity is no longer characterized by reliance on innovation in large firms but has shifted to S(mall) and M(edium) E(nterprise)s and startup firms. Innovation in SMEs is one of the major drivers in the economic resilience of a region. In this paper, we will focus on open innovation practices in SMEs and the use of a specific organizational form to organize the open innovation process. Design/methodology/approach: The paper presents the results of a participatory study on one of the major mechanisms for SMEs in their practice of Open Innovation, which comprises a specific organizational form to cooperate with (local) Universities. Based on the 'Engaged Scholarship' methodology (Van de Ven, 2007) four main activities are undertaken in a cyclic model: problem formulation, research design, theory building and problem solving. By applying a survey, multiple case studies and a benchmark study a thorough understanding of the problem and the solution was found. Originality/value: In our study, we found a specific form to overcome the challenges for SMEs to cooperate with Universities. This form was later named the Innovation Hub. Innovation Hubs are a specific organizational form in which students enhance the innovative capacity of one or more companies by the implementation of research and innovation projects. In the paper the strengths and possible challenges of the Innovation Hub will be discussed and the first results of our project to raise a set of Innovation Hubs for SMEs in the Eastern part of Holland will be presented. Practical implications: The mechanism for Open Innovation in SMEs discussed in the paper has positive effects on the outcomes of innovation of the SMEs as well as their possibilities to attract (technical) young and talented professionals. In the research, it was found the Innovation Hubs also seem to have a positive impact on the regional innovation system thus preventing the so-called "Brain Drain" from rural areas to the larger cities.