Developing technological capabilities for Industry 4.0 adoption: An analysis of the role of inbound open innovation in small and medium-sized enterprises

Abstract

To keep up with rapid technological change, firms are pushed to acquire new competencies and resources, often leveraging the external networks in which they are involved. The paper examines how firms' engagement in inbound open innovation (OI) enables the adoption of Industry 4.0 (I4.0) technologies in small and medium-sized enterprises (SMEs) through the deployment of technological capabilities. We combine the OI and dynamic capabilities frameworks to assess how the absorption of knowledge from different actors impacts the necessary technological capabilities for adopting I4.0 technologies. The capabilities are categorized in technological sensing, seizing and reconfiguring. The study is based on in-depth case studies of two selected SMEs from the footwear industry. The cases show that engaging in external collaborations, particularly with universities, pushes SMEs to renew the bundle of competencies underlying their technological capabilities. However, this effect is influenced by the OI modalities adopted by both companies. While in Company A OI takes place through a broader array of formal and informal linkages that contribute to the exploration of distant knowledge bases and the experimentation of more diverse technologies, such as the Internet of Things, Company B relies on informal networking concentrated in its own field of specialization for the adoption of manufacturing-specific I4.0 solutions, such as automated robots and 3D printing.