ABSTRACT

This chapter starts with the introduction of the concept of the evolution of competition and how it affects small and medium-sized enterprises (SMEs) operations and competitiveness. It focuses on the concept of open innovation which has been proposed as a new paradigm for the management of innovation. The chapter establishes a theoretical framework to function as a springboard for the investigation and presentation of the concepts of industrial districts, networks and business clusters that are the primary focus of evaluation and analysis. It discusses the emerging ways for an SME to retain its competitiveness and addresses the issues of networking, strategic alliances and collaborations between enterprises as well as open innovation. The chapter explores the historical roots of business networks and strategic alliances, and attempts to explain why companies, particularly SMEs, should engage themselves in such activities and pursue co-operative strategies. Today's networks, the Internet, video conferencing and computerized tools make possible flexible but tightly coupled linkages between corporations.