Collaboration with whom? SMEs at a Crossroad between R&D partnership exploration and exploitation

Purpose of the paper: Collaboration with external partners is essential for small- and medium-sized enterprises (SMEs) that want to innovate. The purpose of this paper is to examine the impact of three different types of R&D collaborations, namely with universities, research centres and other companies, on SMEs’ product innovation and innovation performance. Methodology: Hypotheses are tested using a Probit/Tobit regression on an Italian sample of manufacturing SMEs. Findings: Our analysis shows that collaborating with universities has a positive impact on product innovation, but not on innovation performance. Whereas, collaboration with research centres and other companies has a positive impact on both product innovation and innovation performance. Research limits: Our results refer to a specific area, Italy, and to a specific period, so that the usual problem of generalisability across time and space arises. Moreover, we focussed on R&D partners considering only three groups, universities, research centres and other companies. For the latter, data at our disposal allowed us to differentiate neither between rival/not rival companies nor on the basis of their industry, size or geographic location. Practical implications: Our findings provide implications for SMEs managers and entrepreneurs who have to decide between R&D partners for their explorative vs exploitative outside-in innovation strategy. Our findings reveal the need to align different R&D partners with different expectations and final outcomes. Originality of the paper: Previous studies shed minimal light on open innovation practices in the SMEs context. Just a few looked at the effect of different R&D partners on product or process innovation and innovation performance (this latter often measured with product or patent number) but separately. We looked at the effects of different R&D collaborations on both product innovation as well as the monetization side of the SMEs innovation process.