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Activating the Innovation Potential of SME: The Bottom-Up-Approach

In this paper we propose an innovation model for the collaboration between SME and public research institutions in order to enhance knowledge transfer and to foster the creation of a regional innovation network. A third aspect is to enhance a more intense cooperation in the public research sector between institutions and departments. In this paper we discuss the term innovation and describe the following aspects: (1) the general idea of the developed bottom-up innovation model, (2) the organizing framework of the participants in the network and (3) the procedure in the innovation process. 1 Innovation is the Key Successful innovation is the basis of a competitive economy and sustained economic long-term growth. Research and development (R&D) accounts for nearly half of the economic growth in the U.S. [PK03] [AW08]. As innovation cycles become shorter and development costs continuously increase, companies are under constant pressure to adjust their innovation development and management schemes. Nowadays it is more and more essential to collaborate with other businesses, customers, institutions and even with competitors in order to include expertise not covered by the company itself into the innovation process. Using open innovation in order to share internal and integrate external knowledge within the process of idea generation, research, development and commercialization stages help to reduce costs and risks of innovation schemes [Ch03]. The open innovation paradigm provides the opportunity to pursue innovations which do not fit into the current company strategy or to commercialize ideas generated outside the company [PD09] [GE06]. Furthermore, innovations are increasingly not developed by one single company, but are more and more created cooperatively through an entire value chain with several companies involved. Especially high-tech businesses such as information and communication technologies are forced to open up their internal innovation process and band together in networks to adjust to the global evolution pace. For small and medium-sized enterprises (SME) it is vitally important to create innovation networks, as they are frequently neither able to provide all skills needed in