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  1. 1. Most businesses in the 21st century are developing partnerships which are creating a favorable climate for innovation. There is a lot of literature that supports non-collaborative form of relationship in stimulation of creativity and innovation in business (Summaries of research projects from around the world, 2006). Non-collaborative relationships are relationships suitable for most of business transaction (Robbins & Coulter, 2007). Non-collaborative form of relationship is essential in a business transaction because what is sold or bought is strictly defined by set specifications (Allen, Buchanan, Edelsky and Norton, 1992). These are relation of convenience (Tomlinson and Fai, 2013), and are only replaced when one party decides to offer superior value to another party. According to Kessler et al (2007), this form of collaboration acts as external factors that behave the same as the competition. There is substantial literature supporting that most of the innovations from Medium sized enterprises are propelled by external networks alliances (Lee, Park, Yoon and Park, 2010; Ritter and Gemünden, 2003), and joint venture (Zeng, Xie, and Tam, 2010). Additionally, the government also recognizes this phenomenon through enacting policies encouraging development of innovation schemes (Van de Vrande, De Jong, Vanhaverbeke and De Rochemont, 2009). On the other hand, there is enough literature that supports the notion that a noncollaborative or informal relationship enhances innovation (Rothwell and Dodgson, 1991; Freel, 2000; Lasagni, 2012). These informal relationships enhance innovation through provisions of insight that help to upgrade innovation and create favorable avenues for commercialization of the innovations. This open innovation (innovations steered from non-collaborative relationships) allows examiners to shift their focus from within the organization and look at other external factors (Lasagni, 2012, p. 310; Robson, 2002). External factors that steer innovation include end use customers, competitors and suppliers (Zhou and Li, 2010; Frost, 2003). However, due to
  2. 2. limited research done on the importance of non-collaborative relationship, little is known about the overall impact of this relationship on innovativeness. Additionally, more research is needed to understand the impact of different relationships on the speed and quality of innovation in organizations. Therefore, this research is dedicated to understanding how the non-collaborative relationship enhances innovation within SMEs in north of England (Lichtenthaler, 2011). Additionally, commercialization of innovations also constitute to the muscle of discussion in this study. Assumption made in this study is that organizations with a good reputation are in a better position to commercialize their innovations. These organizations earn profit from commercialization. Therefore, they have a greater access to the market. This study explores genuineness of this claim. Why choose SMEs? According to Chesbrough (2006b), SMEs are start-ups. These are companies that harbor technologies and are also experimenters of new technologies (Chesbrough, 2003; Chesbrough, Vanhaverbeke and West, 2008; Chesbrough, 2006). They are flexible, experiment different business models and very sensitive change of the business environment (Gutterman, 2004). Chesbrough, Vanhaverbeke and West (2006) claimed that SMEs operations are centralized, and thus they do not have hierarchal chain of command (Hollenstein, 2001). This makes them able to meet the needs of modern business. SMEs quickly analyze the market condition and develop strategies concerning business relationships with other organization (Hollenstein, 2005; Ussman, Franco, Mendes, and Almeida, 1999). Research questions
  3. 3. The business external environment comprises of many factors that influence the output of the organization. However, this research limited to a number of factors, which relate business cooperates and commercialization of innovations; they include:  What are the characteristics that enhance the likelihood of non-collaborative relationships which could lead to open innovation for SMEs?  Can these characteristics be created in SME clusters in England?  What are the impacts of non-collaboration relationship on SMEs in the North of England  How can SMEs present in the North of England utilize these relationships to enhance innovations?  Do all the relationships in business have the same effect on the speed and quality of innovation experienced in SMEs  How does relationships hinder or enhance commercialization of innovation in relation to market access and reputation  How do price competition enhances creativity in SMEs Literature Review In business literature, there is great knowledge about how the external environment affects organization. Example of external environmental analysis is PESTLE (Markham, 2013; Roberts, 2004). This business analysis models analyse the political, social, economic, legal and environmental factors that influence businesses (Simonin 1997; Smith et al., 2010). However, little consideration is given to other external factor that forces the organization to change their products and product development processes. These factors include customer preference and organization interrelations. According to (Schein, 2010), when organizations collaborate, they provide opportunities in which they can collect strength from each organization and use practices
  4. 4. of one organization to the other’s processes. In addition, Rowley and Sambrook (2009) imply that large social forces in the work place have shown to have a larger influence on individual abilities. In other words, work environment has bigger effects than person traits such as skills and capability. In this respect, SMEs are much shaped by the outer environment in terms of innovations. Innovation refers bringing change that is previously unknown to the world (Schroeder, Scudder and Elm, 1989; Evangelista and Sirilli, 1995; Rogers, 1998; Covey, 2004; Baregheh, Rowley and Sambrook, 2009). Innovations are encouraged in businesses in order to attract customer, as well as retaining customers (Watkins, Mohr, and Kelly, 2011; Gitman, and McDaniel, 2008). A number of studies indicate that consumer preference in the 21st century is continuously changing, and only flexible organizations with the ability to respond to these needs will survive (Rammer and Schmiele, 2008; Rammer and Schmiele, 2008). Additionally, Zadek (2006) argues that innovation is a unique way to commercialization. Therefore, it is an area that requires a lot of research. The roles of formal relationships impact on innovation are greatly studied with many scholars establishing the relations. For instance, Lasagni (2012) shows that, innovation is high in SMEs that focuses on strengthening their relationships with innovative suppliers, customers, and users. Additionally, innovation is also high in SMEs that collaborate with research institutes. On the other hand, Tomlinson and Fai (2013) indicate that cooperation between rivals does not enhance innovation. The study findings provide and evidence that informal relation can promote innovation in SMEs. However, the study findings do not provide any mechanism in which innovation can be achieved. In addition, Love and Roper (2013) indicate that there are purposive links developed SMEs and their partner. These partnerships are contributors of innovation and
  5. 5. export in SMEs. Additionally, factors such as targeted supply and demand side have proven to be the promoter of innovation and exporting. However, there is little known about environmental characteristics that play the greatest role in influencing innovation in SMEs (Love and Roper, 2013). Apart from non-collaborative relations, there are also other associations that promote innovation and creativity in SMEs. According to (Matthews and Sawang, 2010; Fritz, Rickert and Schiefer, 2009; Sousa Filho, Wanderley, Góme and Farache, 2010), these associations are brought about by competition within the market. However, these associations are regarded as unethical (Gugler and Shi, 2009; Caldwell, Hayes & Long, 2010), but they are there in the market and play major roles in promoting creativity (Werther and Chandler, 2010). Many SMEs face the problem of commoditization burden in their market. In the same way, technologies have a lifecycle the same way price competition and commoditization emerge and start to take control of the market. However, SMEs are not effective in price competition and thus opt on innovation for a fight for market share (Macbeth, and Purchase 2004) Therefore, because these associations have their roles in promoting creativity, research is necessary to understand in which mechanisms they promote creativity. Jennings de LurdesVeludo, Macbeth, and Purchase (2004) suggest that critical research is necessary to promote this body of literature. However, at the initial level, studies on these associations may be criticized because scholars may assume that these relationships are being promoted. However, Jennings (2012) claims that, despite the absence of literature, these practices are not combated. In this respect, these associations are promoting creativity which is creating avenues for commercialization and increase of revenue for the organization (Perkmann and Walsh, 2007; Henkel, 2006). Additionally, the impact of open innovation is not unilaterally
  6. 6. supported in the literature (McLean, 2005). Most of the case studies of open innovation are for large enterprises and only few for SMEs (Kraus, 1993; Idrissia et al., 2012; Wincent, Anokhin and Ortqvist, 2010). This phenomenon leads argument that all open innovation activities will not favor SMEs Innovation performance (Mazaria, Gonzalez, and Avendano, 2003; Powell and Grodal, 2005). Thron, Nagy, and Wassan (2007) suggest that, only degree of openness of SMEs to innovation can mediate the relationship between open innovation and SMEs. This degree of openness can be classified as closed, open, user-driven, or interactive. These factors do not only influence relationship, but they are also mediated by other factors. According Brandon (1998), factors that mediate these relationships are further mediated by factors such as national and regional proximity, as well as external obstacle to innovation and the age of SMEs (Treister, Batra, Chen and Eliezer, 2001; Cox, 2004; Kim and Park, 2010). There are studies on the same subject which has developed models that try to explain innovation performance, and find the factors that enhance performance. For instance, Bondy, Moon and Matten (2012) indicate that, SMEs will only harness power of external open innovation. This is through the development of a high level of innovation ambidexterity Thron, Nagy and Wassan, 2007). Innovation ambidexterity refers to the ability of the organization to innovate from external and internal perspective simultaneously (Hughes, Martin, Morgan and Robson, 2010). However, Caniels and Romijn (2003) suggest that, SMEs require appropriate organization structure and balance to innovation to achieve innovation ambidexterity. In addition, the complexity of the development process and complex innovation are also highlighted. Pullen et al. (2012) opines that complex innovations make the smallness of SMEs a problem. However, complex innovation make SMEs rely to open innovation such as suppliers to aid them develop complex products to be feasible (Keilbach, Tam and Audretsch. 2009).
  7. 7. The above literature implies that the drivers of open innovation have previously been examined. However, up to date there is no single study dedicated to knowing impacts of open innovation drivers on innovation have been done (Perkmann and Walsh, 2007; Gassmann, Enkel and Chesbrough, 2010; Gassmann, 2006). In this respect, this study is dedicated in feeling this gap by considering these factors in the same study in order to come up with a model for north London. Although these relationships are good for innovation, commercialization of innovation is crucial for organization health (Rafinejad, 2007; Landstrom, 2008; Nelson, 1982). Commercialization of innovation can be promoted by inter-organization relationships, which have a synergistic effect which can change their product as well as process. However, collaborations create avenues for revenue cannibalism, which can harm the aim of all collaborating party. Therefore, this creates confusion on the stand of commercialization of innovations, and impact of various relationship because the can promote or discourage commercialization (Henkel, 2006; Jansson, 2008; O'Mahony and Robinson, 2007). Therefore, the research will also explore the best relationships that can promote commercialization of innovation and those that discourage it. However, the literature is still incomplete because it does not demonstrate the impact of collaborations on innovation and does not specify the relationships that can be favorable for one or more organization. Conclusion Literature analysis shows that this study will provide an understanding of this area by filling the gap that already prevails. The analysis also presents open innovation strategies which can be identified and aids the understanding of non-collaborative relationships. The next step in
  8. 8. the study is to identify high quality innovations from SMEs in the North of England in order to capture the best case study to answer the research question.
  9. 9. References Allen, J., Buchanan, J., Edelsky, C., & Norton, G. (1992).Teachers as" they" at NRC: An invitation to enter the dialogue on the ethics of collaborative and non-collaborative classroom research. In Literacy research, theory, and practice: Views from many perspectives. 41st yearbook of the National Reading Conference (pp. 357-366). Baregheh, A., Rowley, J., &Sambrook, S. (2009). Towards a multidisciplinary definition of innovation.Management decision, 47(8), 1323-1339. Black, G., Church, J., & Holley, D. (2004). Empirical estimation of agglomeration economies associated with research facilities. Atlantic Economic Journal, 32(4), 320-328. Bondy, K., Moon, J., &Matten, D. (2012). An institution of corporate social responsibility (CSR) in multi-national corporations (MNCs): Form and implications. Journal of business ethics, 111(2), 281-299. Brandon, P. R. (1998). Stakeholder participation for the purpose of helping ensure evaluation validity: Bridging the gap between collaborative and non-collaborative evaluations. American journal of evaluation, 19(3), 325-337.