Unlike large-scale enterprises, SMEs are not usually equipped with to implement innovation management processes due to scarcity of resources (e.g. lack of project management staff and experiences). Instead, SMEs frequently have unsystematic and ad-hoc innovation processes. For example innovation activities in SMEs normally lack long-term strategic thinking. It is often quite the opposite as often innovation activities take place as immediate responses to short-term customer demands. Or sometimes without integrating customers in the innovation process at all, as the most important external innovation source (Aslesen et al, 1999; Buhl, 2009; Fortuin et al., 2007; Rammer et al., 2006). Furthermore, SMEs lack detailed market information (including information on technological trends and new technological possibilities) during the innovation initiation phase (Rammer et al., 2006). Without market information it is difficult to implement an innovation to satisfy market demand. Furthermore, they lack experiences to identify and codify currently existing internal technical, organisational or strategic problems (Klerkx, 2008; Klerkx and Leeuwis, 2008a; Aslesen et al., 1999). A clear demand articulation is of great importance for finding a knowledge provider and cooperation partners as part of the problem-solving process.

During the implementation of innovation activities, SMEs face problems due to lack of professional staff (Buhl, 2009). Rammer et al. (2006) argue that large scale enterprises are able to offer more promotion prospects and higher salaries compared to SMEs. Therefore, highly qualified staff might choose rather to work for bigger companies as employer than SMEs. Furthermore, deficient organisational coordination is a main barrier for the implementing of innovation activities. Especially in SMEs, management time and skills are in short supply (Lienemann and Lehnert, 2005). In this field, a demand for management support is recognised since missing management skills could harm an effective implementation of innovation projects (Batterink et al., 2006; Henry and Walker, 1991; Lienemann and Lehnert, 2005). Finally, high innovation costs and missing financing opportunities are further barriers (Batterink et al. 2006; Buhl, 2009; Klerkx and Leeuwis, 2008a). These barriers can be minimised by management initiatives, e.g. by the acquisition of subsidies and public funds. Beside these barriers SMEs have a major advantage compared to large scale enterprises when it comes to innovation: Short management ”chains of command” are common in SMEs, enabling them to make prompt decisions (Buhl, 2009).

In conclusion, economic considerations and insufficient innovation competencies are the main barriers to innovation in the agrifood industry. Further, Costa and Jongen (2006) list the following major barriers to the implementation of consumer-oriented innovation strategies focussing on new product development (NPD)

­ The lack of concrete guidelines for the effective implementation of consumer-led food product development in everyday industry practices;

­ The sequential nature of consumer-led NPD, in a clear contrast with the reality experienced by R&D practitioners in their activities;

­ The lack of intra- and inter-organisational coordination or integration of R&D and Marketing’s research activities and know-how.”

 

Barriers that hamper inter-organisational innovation activities

Some of the innovation barriers mentioned above can be overcome by inter-organisational innovation processes. But it is difficult for a large number of enterprises to initiate and participate in innovation cooperations. A survey conducted by Lienemann and Lehnert (2005) indicates several barriers in connection with R&D cooperation expressed by SMEs in the German agrifood sector.

 

Figure 8: Barriers in connection with R&D cooperation in the agrifood sector (Lienemann and Lehnert, 2005)

 

In relation to potential innovation cooperations, companies as well as research institutions are complaining about the lack of interfaces between business and science as being an obstacle for innovation cooperations (Lienemann and Lehnert, 2005; Aslesen et al., 1999). It is difficult for companies to obtain an overview of the research landscape, and so the knowledge market is not sufficiently transparent (Aslesen et al. 1999; Buhl, 2009; DGQ, 2000). In addition, the quality of service offers from cooperation partners is difficult to assess beforehand (Czarnitki et al., 2001; Lienemann and Lehnert, 2005; Pollard, 2006; Klerkx and Leeuwis, 2008a). In this context, the notion of reputation can also be cited. The quality of cooperation partners can often only be rated through good experiences or through their reputation. Hereby trust in the competence of potential cooperation partners plays a decisive role. Scepticism and lack of trust towards cooperation partners can impede the readiness to cooperate (Czarnitzki et al., 2001; Buhl, 2009; Lienemann and Lehnert, 2005; Pollard, 2006).

Furthermore, actors within cooperation have to come to terms with different work cultures: while companies follow the generation of quick solutions, the research institutions concentrate more on the applied method. This can lead to business and science working in different chronological dimensions (Klerkx, 2008).

Limited by the large circle of actors, the coordinated decision making mechanisms must be implemented and complied with, which can, however, slow down the coordination process (Buhl, 2009). In accordance with this, longer process running times present further barriers to the innovation cooperation process, because of the comprehensive coordination of the involved actors.

A very significant aspect, which is of great importance to the innovation cooperation, is the subject of intellectual property. Even on the individual business level and especially in SMEs, a lack of knowledge, high searching, application and policing costs can be observed in this area. If an innovation is generated within cooperation, there can be problems with the perception of ownership in that, for example, what counts as individual business knowledge and what counts as joint knowledge has not been clearly defined (Ladeur and Vesting, 2008). Further challenges (possible boundaries for networks of individual partners) would be: no sole use of patents of newly developed product / process innovations, or also the exposure of personal knowledge when opening up to competition (Buhl, 2009). Regulations for handling joint intellectual property as well as already existing knowledge that individual partners bring should definitely be laid down in contract. Such contractual regulations offer protection for network partners and can support the necessary openness within the cooperation.

Barriers in connection with innovation processes that have an impact on the initiation and implementation of innovation cooperations are relevant for all companies, even if these barriers are mentioned more frequently in connection with SMEs. It can be assumed that in cooperation situations involving scientific and industrial actors, special problems regarding planning (e.g. searching for appropriate partners) and management (e.g. the coordination of consortia) are likely to occur. Reasons these difficulties might be the different backgrounds of various partners regarding organisational culture and more specifically research approaches, the availability and deployment of missing resources, and, not least, the huge administrative effort required in the management of innovation networks.

Potential barriers related to the formation and establishment of innovation networks and as well the initiation and realisation of innovation projects are listed in the following table (Table 2).

 

Table 2: Barriers hampering the innovation process