To be competitive, small and medium-sized enterprises (SMEs) need to transform their business models. To overcome the liability of smallness, SMEs often need to collaborate with external partners—implement open innovation. The complex processes behind business model transformation and open innovation combined remain unexplored. Linking the literature on business model innovation, open innovation, and SMEs, we examine how open business models can be a solution for SMEs. In particular, taking a process perspective, we study business model transformations in several European SMEs using a two-dimensional typology of SME business model innovation, considering the radicalness of the transformation and SME openness toward external partnerships. We identify the triggers for SMEs’ business model innovation: market turbulence, market immaturity, competition, prior failure in open innovation, and scaling production. We also signify how SMEs address the challenges related to the open business model transformation.

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This article explores a phenomenon of a regional startup ecosystem—its key elements, resources and mechanisms needed for the ecosystem development and growth. Despite famous success stories of such regional ecosystems as Silicon Valley, the literature suggests multiple problems to emerge on the ecosystem development pathway. One of the common issues is a relative disconnect between the knowledge subsystem represented by research centers or universities and a business subsystem represented by mainly large firms. The current understanding of the underlying mechanisms helping to bridge the gap between knowledge and business ecosystems in entrepreneurial regions remain limited. Studying the case of one of the oldest science and technology parks in the world, Research Triangle Park in North Carolina, usa, we explore the development of a regional ecosystem—its elements, challenges and mechanisms to address those. Our findings reveal the key elements, with entrepreneurial networks being one of the most crucial, and explain the difficulties in the elements’ interaction.