In times of economic challenges organizations need innovation and

entrepreneurship more than ever in order to achieve long-term financial

sustainability and competitiveness organizations cannot stand still but need to
be able to adapt to a highly dynamic environment by being innovative and
entrepreneurial in ways that respond to the environment and opportunities While
this can be a challenging process, those organizatio n, that can successfully
integrate innovation and entrepreneurship as part of the day-to-day
organizational philosophy achieve significant benefits.
The objective of this chapter is to examine innovation and entrepreneurship in
SMEs and large corporations. Innovation and entrepreneurship are discussed to
provide an understanding of their importance for SMEs and large corporations in
every industry and sector. The meaning and importance of open innovation and
the value it brings to organizations is discussed. Following a discussion on the
forms, processes, and sources of innovation, this chapter concludes with a discussion
on the importance of innovation as a coupling activity that links the market and
technology.
Innovation and Entrepreneurship in Context
Innovation and entrepreneurship are very important as they allow organizations to be
competitive and provide them greater resilience in turbulent, uncertain economic
environments. During an economic crisis, innovation and entrepreneurship can stimulate
the expansion of SMEs and large corporations in their existing or new markets. In the new
economy, knowledge has become a primary resource to become more innovative and
entrepreneurial. It is fundamental that organizations find new ways of utilizing existing
knowledge and creating new knowledge that will stimulate innovation. Through this
knowledge, these innovations open the way to new and advanced products and
services, new business processes, new management concepts, and new markets. Highly
innovative organizations that implement very successful innovation practices include wellknown global companies such as 3M, Amazon, Apple, Facebook Goo*, Samsung, and
Twitter, as well as lesser-known organizations such as Natura (cosmetics). Embraco
(international leader in refrigeration), and Petrobras (one of the world's largest energy
companies). Building and developing competencies to be entrepreneurial and to innovate
new product and services puts the organization in a strong position to meet todays
demands and challenges while also being ready to adapt to future environments and
circumstances and succeed in tomorrows innovations. Zaras competitiveness in
innovation comes from its drive and determination to consistently produce new things
based on customer desires, technological developments, and market changes.

The role of SMEs has changed as competitive advantage has moved closer to knowledge-based
economic activity and globalization. SMEs make a significant contribution to the European
Unions (EU) economy are responsible for a significant number of new product innovations,
causing large manufacturing corporations to lose competitive advantage. In the EU, 98% of
enterprises are SMEs; large corporations, account for only 0.2%. EU micro-enterprise
performance was most stable in 2009. The recovery in 2010 was spearheaded by SMEs. The
SMEs in the EU that are leading the way in innovation are quickly recovering in terms of value
add compared to their counterparts that are modest innovators In 2009, the United States had
a larger reduction in SME employment (-6 0%) in comparison to the EU (-2.7%). Prior to the
European recession, there was a downward trend in SME development in Japan.
Economic downturns frequently generate a growth in the number of business start-ups.
However, in the United States there was a fall in the number of SMEs in 2009 whereas the
number of large enterprises marginally increased. The potential for innovation and
entrepreneurship in SMEs and large corporations has been challenged by the global recession.
Organizations in all industries and sectors need to manage this through knowledge and the
development of external relationships. This requires organizations to develop and implement
better approaches to innovation and entrepreneurial strategies in order to not just survive but
to achieve a competitive, sustainable position no 'natter what economic environment they may
encounter.
Open Innovation
Innovation and enrepreneurship are major factors for organizations in achieving economic
success and sustainability. In today's challenging, dynamic, and competitive global market,
organizations need to be innovative and entrepreneurial and create commercially viable, high
quality products and service more efficiently and effectively than before. To address these
challenges, organization need to develop new techniques to the strategies and processes of
their innovations that will give them every opportunity to achieve their full potential and to be
the best they can in light of economic conditions.
Organizations are now facing intensified global competitiveness and increasing research and
development ( R & D ) expenditures. Their own R & D efforts are no longer sufficient for their
survival and sustainability but need to develop and implement new approaches to innovation in
order to achieve competitiveness. Open innovation, a term developed by Henry Chesbrough, is
one key approach that organizations are embracing. AS