Effects of open climate on innovation radicality in SMEs: relevance of hidden innovation

Abstract

 Purpose: Open innovation is an issue that has aroused great interest in recent years. The need to create an environment that facilitates the creation of ideas is essential for the implementation of a series of changes in organizational practices and routines that lead to the launch of new products. However, due to the more behavioral nature and the lesser externalization of these changes introduced in the company's internal processes, how this process occurs has not been studied in depth. However, there are few empirical studies on the climate of open innovation in the field of small and medium-sized enterprises (SMEs). The objective of this study is to analyse the effect of an open innovation climate on both incremental and radical product innovation. Moreover, it specifically analyses the mediating role played by hidden innovation in this relationship.  Design/methodology/approach: The methodology used in this study was based on a survey of 213 Spanish SMEs, subsequently applying the structural equation methodology to contrast the results.  Findings: The results indicate that the open innovation climate offers significant competitive advantages to SMEs. First, the open innovation climate in SMEs favorably influences product innovation (both incremental and radical). Secondly, it is observed that hidden innovations are essential to obtain product innovations. Finally, evidence of the mediating effect of hidden innovation has been obtained.  Originality: The main interest of this work is based on the importance of hidden innovation for the development of innovations. Our study shows how organizations must make a series of organizational changes prior to the implementation of more visible innovations materialized in products. For this task, the creation of a favorable climate for the development of new ideas becomes a fundamental task. On the other hand, this study has focused on SMEs, which tend to have fewer means for the development of the right conditions for innovation and are often more neglected by scientific research.  Research limitations/implications: Although the literature often focuses on visible innovation, materialized in product development, this study once again demonstrates the importance of other types of innovations that are necessary to launch new products. This is especially relevant for SMEs that, with limited resources, must be creative enough to involve their personnel in introducing changes that will lead to new products. This paper attempts to strengthen the previous literature on hidden innovation by contributing to the understanding of how SMEs improve their innovative processes. However, the study has the limitations inherent to cross-sectional studies.  Practical implications: Managers of companies involved in innovation processes should pay more attention to creating conditions that facilitate the creation of new ideas or the implementation of less visible but necessary practices to develop innovation.