Open innovation strategy and performance of SMEs in the IT industry located in Korea’s innovation clusters: the role of government subsidies

ABSTRACT

This study examines the effect of small and medium-sized enterprises (SMEs)’ open innovation activities on performance, depending on the growth stage. It also studies the mediating effect of government subsidies on SMEs’ innovation performance. We collected data from 452 SMEs in the information technology (IT) industry located in Korea’s innovation clusters. The findings show that SMEs’ absorptive capacity and external network activities positively influence their performance, with stronger effects for SMEs in their mature growth stage. Moreover, a higher ratio of government subsidies in R&D investment positively mediates the relationship between external network activities and innovation performance. This study presents several implications for policymakers to support SMEs’ R&D activities using government subsidies.

KEYWORDS:

• Open innovation
• Government R&D subsidy
• Innovation performance
• Korea’s innovation cluster
• Growth stage

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Notes on contributors

Soo Chang Son

Soo Chang Son is a Senior Researcher at Korea Innovation Foundation (INNOPOLIS Foundation). He received his Ph.D. in Technology Management from the Korea Advanced Institute of Science and Technology (KAIST). His research interests concern technological innovation strategy, national and regional innovation systems, and open innovation.

Hangjung Zo

Hangjung Zo is a Professor of digital innovation management at the School of Business and Technology Management, KAIST. He obtained his Ph.D. in IT management from the University of Wisconsin-Milwaukee. His research interests include digital innovations and the impacts of digital technology on business and society. His papers have been published in several prestigious journals, including IEEE Transactions on Systems, Man, and Cybernetics, Decision Support Systems, Journal of Business Research, Electronic Commerce Research and Applications, and Computers and Education, among others. He is also the director of the Center for Technology Management and Innovation.

Myeongki Jeong

Myeongki Jeong is a Senior Researcher at the Korea Railroad Research Institute (KRRI). He received his Ph.D. in IT management from the Korea Advanced Institute of Science and Technology (KAIST). His research interests include determining organizational security policies and their impact on the privacy of individuals. His research has appeared in Computers in Human Behavior, and Telematics and Informatics.

Tom Steinberger

Tom Steinberger is an Assistant Professor at the School of Business and Technology Management, KAIST. He received his Ph.D. from the University of California, Irvine. His current research focuses on the strategic management and organization of data and intelligent technologies.