Abstract:

European average SME lacks operational profit margin growth, while other successful companies gain superior performance based on the higher income generated from innovations. Thus, European SMEs are becoming more aware that business as usual is no longer sufficient and that their future depends on their ability to offer innovative products and services, innovative business models, or their capability to identify new business options to diversify into different business and industrial sectors. Managing the entire innovation process, from new idea to launch, requires a clear innovation strategy, an organizational culture that supports innovation, and innovation activities that ensure that the right ideas are developed efficiently.

Due to the rapid development of the global economy, many companies choose to diversify its strategic choice in addition to the incorporation of new economic activities, has become indispensable to become or remain a dynamic company to be competitive. Thus the diversification strategy is an option for the growth and competitiveness of SMEs allowing innovate and create new business opportunities.

One of the way of the diversification is the “related diversification”, which consists in a detailed process that takes place when a business expands its activities into product lines that are similar to those it currently offers. There are several sources to identify different options to diversify companies. One of these technological source is the 4th Industrial revolution and its implications in today business, taking into account the similarities between the current value chain and the future value chain.

Currently, we are experiencing the fourth industrial revolution in which converge the real world and the virtual world through cyber-physical systems. This system with embedded software are able to: collect data from the physical world, process and store information allowing them to intervene actively with both the physical world and the digital world, stay connected with other systems through different interfaces and have in turn interfaces mechanisms to enable human-machine interaction.

Given the context of the Industry 4.0, the aim is to support and sustain companies to be able to identify new opportunities for diversification in areas within Industry 4.0. In this context, the role of university-industry collaboration is crucial, as universities are natural places to identify, initiate and develop local lifelong learning programs while also maintaining other collaborations on research or development, what assures a flow of ideas and innovative knowledge into SMEs. These companies, and the people involved, need to update and upgrade their competences and skills on Industry 4.0 and its opportunities to diversify into new industry sectors, by developing their innovation management operational and strategic capabilities.

The aim of this paper is to show Mondragon University´s approach to the implementation of a collaborative university-industry experience focused on the development of Industry 4.0 diversification management capabilities in SMEs. The present paper shows the development and results achieved through the project BARNELKAR. Concretely, this paper explains the processes, tools and outcomes of this experience in several small SMEs, as long as the results obtained, lessons learned and proposals for SMEs and Universities approaching this challenge.

Keywords:

SMEs, university-industry collaboration, innovation management, Industry 4.0, diversification strategy.