ALITE: Open innovation and experimentation in a small learning organization

Open innovation (OI) is being regarded as a new paradigm in understanding innovation processes. Being rooted in previous research in collaboration for innovation, it is currently widely used both in academic and practitioner analyzes. While OI is a common procedure in the context of large manufacturing firms, how do small firms cope with collaborations with large technology suppliers is an issue that deserves further attention. This study looks at how OI and knowledge management (KM) are undertaken in a successful, innovative, and small Spanish firm: ALITE. This 35-employees’ firm is managed as a learning organization that favors experimentation as a basic procedure to be creative, solve problems, and create new internal knowledge. Using a qualitative methods approach, we scrutinize how internal knowledge obtained through experimentation in a small shop-floor is integrated with external knowledge flows coming from large suppliers to achieve successful innovation outcomes. Interestingly, ALITE emphasizes the internalization of core activities and the creation of internal knowledge through experimentation to the detriment of external knowledge transfers. Finally, we connect our findings to the OI and KM literature and we highlight a number of important implications for small creative companies.