The Role of Open-Innovation for Product Development: A Study of Swedish Biotechnology Small-Medium-Sized Enterprises in the Healthcare Sector

Abstract: In the rapidly-evolving technological landscape of today, even established research and development (R&D) companies are struggling to keep pace with the demands of innovation. It creates difficulties for small-medium-sized enterprises (SMEs) with especially limited resources to maintain competitiveness within the market. This study argues that open innovation practices can provide a solution to this challenge by leveraging external knowledge and resources to accelerate the pace of internal innovation processes in product development. The study is motivated by the projected growth in the healthcare sector in Sweden and the need for biotechnology companies to bridge the technology-demand gap. It highlights the challenges SMEs face in obtaining needed benefits, such as sufficient funding and attracting specialized talent. Moreover, it suggests that with a suitable approach, open innovation can provide SMEs with the necessary resources to unlock their full potential and contribute to the advancement of the biotechnology industry. In this study, primary data was collected through interviews and surveys, and secondary data by a literature review. Prior to the interviews, a survey was used to ensure that relevant concepts would be discussed and further explored. While in the interview, a more in-depth answer was gathered based on the survey. Data was collected from biotechnology SMEs in the Swedish healthcare sector who have implemented open innovation, want to implement it, and do not plan to implement it. Targeted responders were those essential for the strategic decision (e.g., C-level and Business/Scientific Managers) that work in small-medium sized biotechnology companies in the Swedish healthcare sector. This study shows that for biotechnology SMEs in the Swedish healthcare sector, protecting intellectual property (IP) is the most challenging factor when it comes to implementing open innovation. Moreover, partnership and collaboration are the most suitable open innovation approaches. Finally, gaining knowledge and funding represents the most significant benefits of implementing open innovation.