THE IMPACT ON GROWTH OF OUTSIDE-IN AND INSIDE-OUT INNOVATION IN SME NETWORK CONTEXTS

Abstract

The purpose of this paper is to reveal what impact the dual approaches of outside-in and inside-out innovation have on growth in turnover in small and medium sized enterprises (SMEs) working together in network context. This is illustrated through research in three informal, Danish food industry networks with 60 SMEs responding. The research employs structural equation modelling for statistical analyses. The findings reveal that both the outside-in and the inside-out approaches have a significant positive impact on innovation and growth. The findings shed light on the need for combined dual organising of both to enable innovation and growth. Moreover, the network context does not significantly utilise theoretical insights on loose coupled systems. A contribution is made to innovation theory on the duality of the outside-in and the inside-out approaches for a combined understanding of the impact on innovation and growth. A contribution is also made to the SME-network for organising the loosely coupled system in a dual approach.