Open innovation and transformative leadership in small and medium-sized enterprises in Kenya

Abstract

Open innovation, as presented by Henry Chesbrough in 2003, has been extensively explored in the context of large corporations in industrialized economies. Studies that have been done focusing on the adoption of open innovation in small and medium enterprises have mainly focused on SMEs in developed economies. In order to further explore this practice under different geographical and firm conditions, this research is dedicated to examining the drivers, benefits, and challenges of open innovation adoption by SMEs in developing economies, with a major focus on Africa and specifically Kenya. The study focuses on 10 small and medium enterprises from three industrial sectors, namely manufacturing, retail and ICT. Of these 10, five SMEs will be selected from the ICT sector, three from manufacturing, and two from retail. Admitting that a favorable internal environment is necessary and important in enabling productivity and innovation in an organization, this study seeks to analyze the significance of transformational leadership in driving open innovation. Specifically, it explores how transformational leadership influences employee engagement, productivity and its subsequent impact on open innovation adoption in SMEs. A qualitative methodology was employed, utilizing semi-structured interviews which on one hand interacted with leaders and the other with employees using a sample of 10 Kenyan SMEs. Thematic analysis of the collected data revealed significant insights into the interplay between leadership style, employee engagement, and innovation adoption. Findings highlight the pivotal role of transformational leadership in fostering an environment favorable to open innovation which comes by cultivating trust, motivation, and cooperation between employees. These results contribute to the growing body of knowledge on open innovation and offer practical implications for SMEs in developing economies aiming to enhance their innovative capabilit