Exploring the Microfoundations of Open Innovation: Insights from the Italian SME-Startup Collaborative Landscape

Abstract

Small and medium-sized enterprises (SMEs) and innovative startups play a crucial role in driving economic growth and technological advancement. Open Innovation (OI) has emerged as a key strategy for these firms to access external knowledge and foster collaboration. However, while OI research has largely focused on large corporations or SMEs, limited attention has been given to the microfoundations that shape OI collaborations between SMEs and startups. This study addresses this gap by examining the individual and organizational factors that influence the success or failure of such partnerships. While both SMEs and startups face resource constraints and legitimacy challenges, they differ significantly in their market positioning, operational structures, and strategic priorities. SMEs typically have established industry expertise, stable customer bases, and access to financial resources, yet may struggle with rigid processes and risk aversion. Startups, in contrast, are characterized by agility, innovation-driven mindsets, and exploratory approaches but often lack financial stability, market access, and operational experience. These complementarities present both opportunities and challenges for OI collaborations. Adopting a multiple-case study approach, we analyse seven OI projects in the Italian context, each involving an SME and a startup. Through qualitative interviews and secondary data analysis, we identify key microfoundations that enable or hinder collaboration. Additionally, we introduce a framework to explore how different microfoundations interact, showing that enabling factors can yield mixed or negative outcomes when combined with other elements. This research contributes to the OI literature by providing a nuanced understanding of the micro-level dynamics that shape SME-startup collaborations. The study also offers practical implications for managers and policymakers, emphasizing the need for targeted support mechanisms that facilitate strategic alignment and mitigate potential collaboration frictions.