Supplier-customer collaboration from an open innovation perspective : A comparative case study of four small and medium-sized supplier firms in high-tech defense industry

Abstract

In modern society, with the rising focus on change and rapid development, the ability to innovate has become crucial. With limited time and internal resources available, companies are increasingly realizing the value of collaboration. Open innovation is one way of collaborating, using external actors as key players, and gaining access to knowledge and technology through these external resources.

This thesis presents a comparative case study of collaboration through an open innovation approach in the Norwegian defense industry. By studying four small and medium-sized enterprises (SMEs) that deliver products to a larger customer, I explore whether there could be positive knowledge outcomes from being part of a company’s open innovation strategy. This approach turns the focus towards the SMEs as suppliers, asking whether it is possible to add a new dimension to the open innovation model, one with the focus on the suppliers.

The context here is the development of Joint Strike Missile (JSM), a missile produced by Norway’s Kongsberg Defense Systems (KDS), a major defense supplier and one of the divisions of KONGSBERG (Kongsberg Gruppen). The SMEs in question are four of many suppliers that develop products for the JSM project, as a part of the KDS’ innovation strategy.

By exploring this collaboration between customer and supplier, the thesis argues that the open innovation approach can lead to knowledge diffusion for all parties involved, not only the larger company. This adds a new dimension to the open innovation model, showing that being part of a company’s open innovation strategy can be advantageous for the external technology providers, giving them access to know-what, know-how, know-why and know-who in the process. This knowledge is gained either directly from the customer, or as a consequence of independent work done by the suppliers. The knowledge relevant for future work is dependent on the supplier itself, and may differ from one supplier to another. Thus, there is more to the open innovation model than generally presented in the literature.