Innovation intermediaries help collaborative food SMEs to create a bigger pie
Open innovation has been proposed as an ideal way for food SMEs to develop new products with the assistance of intermediaries to help enterprises to overcome the considerable challenges they face when implementing this strategy.
Open Innovation
Open innovation is a product and process development model, whereby firms use external ideas, as well as internal ideas, to advance their offering. It can involve the sharing of risks and rewards with partners – such as customers, rival companies and academic institutions – in a permeable business environment where innovation can transfer inward to and outward from the enterprise.
Since companies cannot rely entirely on their own research, they have to buy or license processes or inventions from other entities. Internal inventions which are not strategically core to the firm’s business move out of the company, through licensing, joint ventures or spin-offs.
There are a number of challenges to the adoption of open innovation. One is the inability of in-house staff to adopt external knowledge for the benefit of the business.
A second challenge is the organisation’s inability to identify appropriate partners for the purpose of sharing internal expertise and forming joint ventures.
Our Research
According to our research, these issues are particularly relevant to the food manufacturing sector, which is characterised by a lower level of trust between stakeholders compared to other industries.
Food SMEs also have a low rate of participation in inter-organisational co-operation initiatives, which is a key component of open innovation.
The underlying reason for this failure is the inability of these organisations to deal with complex environments.
For example, food SMEs have difficulty identifying potential collaborators at the beginning of the innovation process, due to the fact that they have less access to information than larger firms and have limited financial resources with which to acquire essential intelligence.
These problems are compounded by limitations in their production capacity and marketing expertise. As a result, even when they develop a product or a process which has high potential, they are often unable to make it profitable.
Food SMEs also find it particularly difficult to acquire consumer market information, which is a key driver of innovation, in a sector where consumer preference is the primary consideration.

Malachy Mitchell is co-founder and Managing Director of Farrelly & Mitchell. He works with CEOs, executives and leaders from private enterprises and public sector institutions helping to grow their food sector companies and agribusinesses.
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Innovation intermediaries help collaborative food SMEs to create a bigger pie
Open innovation has been proposed as an ideal way for food SMEs to develop new products with the assistance of intermediaries to help enterprises to overcome the considerable challenges they face when implementing this strategy.
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Innovation intermediaries help collaborative food SMEs to create a bigger pie
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Open Innovation
Open innovation is a product and process development model, whereby firms use external ideas, as well as internal ideas, to advance their offering. It can involve the sharing of risks and rewards with partners – such as customers, rival companies and academic institutions – in a permeable business environment where innovation can transfer inward to and outward from the enterprise.
Since companies cannot rely entirely on their own research, they have to buy or license processes or inventions from other entities. Internal inventions which are not strategically core to the firm’s business move out of the company, through licensing, joint ventures or spin-offs.
There are a number of challenges to the adoption of open innovation. One is the inability of in-house staff to adopt external knowledge for the benefit of the business.
A second challenge is the organisation’s inability to identify appropriate partners for the purpose of sharing internal expertise and forming joint ventures.
Our Research
According to our research, these issues are particularly relevant to the food manufacturing sector, which is characterised by a lower level of trust between stakeholders compared to other industries.
Food SMEs also have a low rate of participation in inter-organisational co-operation initiatives, which is a key component of open innovation.
The underlying reason for this failure is the inability of these organisations to deal with complex environments.
For example, food SMEs have difficulty identifying potential collaborators at the beginning of the innovation process, due to the fact that they have less access to information than larger firms and have limited financial resources with which to acquire essential intelligence.
These problems are compounded by limitations in their production capacity and marketing expertise. As a result, even when they develop a product or a process which has high potential, they are often unable to make it profitable.
Food SMEs also find it particularly difficult to acquire consumer market information, which is a key driver of innovation, in a sector where consumer preference is the primary consideration.

Malachy Mitchell is co-founder and Managing Director of Farrelly & Mitchell. He works with CEOs, executives and leaders from private enterprises and public sector institutions helping to grow their food sector companies and agribusinesses.
Subcribe today
Stay up to date with the latest agribusiness blog, Insights, and more sent straight to your inbox.
Malachy Mitchell's featured publications
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Government & multilaterals
TAG food management targets profitable growth in local food & beverage
Food safety & security
The cost of living crisis: Inflation, price caps and the road to food security
Insect protein, how can companies overcome the ‘yuck’ factor?
Insect protein, how can companies overcome the ‘yuck’ factor?
Food & beverage
The rise of agriculture as an institutional asset class
Food safety & security
BBC report draws on Farrelly & Mitchell analysis of COVID-19 impact in Arab nations
Food safety & security
Supply chains & food security: assessing the impact of disruptive forces
Food safety & security
Farrelly & Mitchell analysis: Lebanon explosion exposes lack of food security plan
Is Covid-19 accelerating ESG investment in food and agribusiness?
Is Covid-19 accelerating ESG investment in food and agribusiness?
Government & multilaterals