Category Archives: Developing countries

Trust – a key factor

When a country lacks:

  • good legislation frame,
  • underdeveloped intelectual property protection and
  • suboptimal business practices,

getting trust becomes crucial for good collaboration.

Every partner in innovation endeavour must have a good credibility, otherwise nobody will want to collaborate with him. Trust is a bridge that connects the gap made by lack of legislation and protection. Obviously, to form a trust between partners, time has to pass and good things need to happen, which is slowing things down. Therefore, SMEs could use some sort of authority to help them reckognize a trustfull partner without having to invest in him first. Sometimes, SMEs turn to general public or their partners, to check potential partner’s reputation. In other cases, SMEs are forced to cautiously get in the business together, constantly probing their partner, and deciding whether he is reliable or not.

Intermediaries

The problem of SMEs lacking resources, infrastructure, legislative framework and trust in developing countries is, in most cases, tackled by organizing some sort of protective innovation hub. This hub is usually sponsored and run by some sort of intermediary body or agent, whether it be a government body or an independent one.

This intermediary needs to be well experienced, organized and unbiased when it comes to innovation projects. It’s role should be to help innovative partners connect, collaborate and share results in a fair way. But, as research suggests, these intermediaries should not “find partners” for the SMEs; rather, they should empower SMEs to find partner on their own, and to help them connect and collaborate.

Main obstacles to OI

Innovation and especially Open Innovation face additional obstacles when it comes to developing countries.

First, SMEs in developing countries have very limited resources for research & development activities.

Second, SMEs in developing countries usually have no knowledge or resources to establish and maintain network that is neccessary for open innovation.

Trhird, developing countries often have poor legislation context, and good legislation is important for complex and delicate issues such as intellectual property protection, profit sharing and liability status.