Managing Innovation in a changing industry: the role of SMEs in the European Automobile Sector

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Abstract:

The automobile industry has experienced dramatic shifts over the past decade or so. Uncertain technological trends, changing consumer demand and de-regulation have subjected the sector to major transformations. Value chains now cross national and industry boundaries, globalization is irreversibly changing the industrial landscape by moving production to emerging markets, and new actors have been appearing along the value chain to participate, along with policy makers, in the development of new automobile ecosystems. The technological and organizational innovations related to these transformations necessitate research that can enhance our understanding of the characteristics of the new systems, evaluate the extent to which they are different to previous systems, and extrapolate the implications of these differences for the wider economy and society. We adopt the Open Innovation framework as a point of reference because it provides an overarching concept that has the potential to encompass various research streams and concepts, including outsourcing, collaboration, and networks. The study investigates the role of SMEs in the rapidly changing landscape of the European Automobile Industry through interviewing purposely selected knowledgeable respondents across seven European countries. The findings demonstrate that despite the efforts of regional authorities, SMEs operating in the car industry are largely restricted in their development choices by lack of adequate funding, limited access to expertise and technology, and prohibitive industry structure.