Manufacturing processes constantly improve with automation solutions, in order to enhance production efficiency, effectiveness, and improved ergonomic solutions. The aim of this paper is to explore the transition of small automation suppliers or integrators into offering product service systems (PSS) through guidance by the Integrated Product Service Engineering (IPSE) methodology. It reports results from a longitudinal investigation of small companies providing solutions for industrial automation and digitalization, in an industrial cluster, where the IPSE methodology was applied. As the era of digitalization and smart industry emphasizes automation and robotisation of the manufacturing industry, the importance of such automation suppliers or integrators increases. There is for example a risk that small manufacturers are left behind due to the high investments needed; the studied small automation suppliers or integrators then can tailor “right automation”. Their customers are both large and small manufacturers. They are known to develop cost-efficient and innovative solutions, in close dialogue with customers. These solutions, developed and tested in the small firms’ workshop facilities with build-and-test laboratories, are rooted in their deep knowledge of manufacturing processes, mechatronics, robotics, control systems, and interface programming. By articulating value-added business offerings as PSS, the small automation suppliers or integrators could develop agreements ensuring increased win-win opportunities for both customers and automation providers, i.e. also their partners and suppliers. The paper presents how the IPSE methodology can facilitate the transition from traditional product or service selling to PSS offerings for the small automation suppliers or integrators studied. The common denominating challenge for the firms in this niche was based on classical business limitations due to smallness. Being a small supplier towards larger customers, negotiation for price and payment dates are difficult; towards small manufacturing firms, the challenge instead being to be able to address the customer company’s lack of investment possibilities. State of practice for the focal firms at the setting out of the study was an unclear business position, with unclear value proposition and fluctuating financial results. The applied IPSE method includes integrated business and technology development and, in the adapted version presented in this paper, addresses especially the liability of smallness that the automation suppliers were suffering from, such as contractual issues, and the articulation of value for the larger market towards their customers, which may be both small and larger manufacturers. The result was a transition from being regarded as stand-alone automation supplier companies towards becoming automation service providers (ASPs).

The study focuses on what core competence SME working with automation solutions for manufacturing purposes have. The study was done both as an interview and a walk around the workshop floor of each company. All the companies in the study belong to the same business network, but had separate ecosystems. The core competence of automation solutions providers is being skilful prototypers. These companies have vast experience working with many types of manufacturing equipment, but much less formal education in the area, so they have almost a sixth sense of which solutions will work. This means they can rapidly start to build prototypes in their workshops, but their customers to help out in a live environment as production engineers and solve everyday kind of problems also usually trust them

Ever since the introduction of Open Innovation as a concept over 13 years ago, it has been debated heavily. Most of the debate has been on the openness itself, such as Open Innovation versus Open Source. Other have discussed it as an old phenomena and that it is not new or changed enough to be able to call it a new paradigm, the aim in this paper is to lift the discussion to a more theoretical area. This literature review shows the different definitions used and is analyzed in how they all relate to the development of the field of Open Innovation, with the help of texts from Kuhn and Wittgenstein, amongst other philosophers. The results show that it is important to have a definition that can evolve by being challenged instead of being destroyed by competing definitions. It is also suggested to let the definition build upon the criteria that has been used and can be measured in empirical data. As an example a sliding scale is used instead of the common binary definitions

Research tends to have a focus on bigger businesses and projects, easily forgetting the SMEs roll in these bigger projects. A qualitative study was conducted within a network of automation companies, all SME:s and mostly microbusinesses. All of the companies explain how they have a core group, or single, customer/s. They do take the odd jobs from others from time to time. Usually they start with a product, such as robot or specialized machinery, and then they add-on services and usually build a long-term relationship where they can interact on a weekly basis to fix problems with the production line, but also to be able to sell new products and services. Their main selling point when asked why a customer returns is that they can solve problems for their customers. Usually the product they do sell is something created with their problem solving skill, it is very rarely a product of the shelf. Manufacturing businesses tend to see this as a machine or robot that they are buying. This is why it is interesting to flip and look from the other side, what are these businesses actually selling. The conclusion is that several of the companies have moved, and are still moving, from selling a product towards selling products and services where they are selling their ability to solve problems on the fly in a functioning production system. 

The research proposal addressed in this paper is to investigate Open Innovation within mi- cro-businesses and small businesses within the automation industry, that are part of their customer’s production development. Previous research on Open Innovation has mainly its standpoint in larger companies, and evidence from SMEs, especially micro and small businesses, is yet limited. Empirically this study is based on an evolving network in the manufacturing automation industry, which has poten- tial of becoming a cluster, ie a geographically concentrated network in the same line of business. Inter- views were carried out in the twenty-one companies in the network, and are planned also with their cus- tomers outside the network. The contribution of this research is to describe how Open Innovation is conducted within and around an automation-network. Another important difference is the production innovation focus, where earlier research have been focusing on product innovation and not the produc- tion innovation.

The research idea addressed in this paper is to investigate Open Innovation within micro-businesses and small businesses within the automation industry. Previous research on Open Innovation has mainly its standpoint in larger companies, and evidence from SMEs, especially micro and small businesses, is yet limited. Empirically this study is based on an evolving network in the manufacturing automation industry, which has potential of becoming a cluster, ie a geographically concentrated network in the same line of business. Interviews was carried out in the twenty one companies in the network, and are planned also with their customers outside the network. The contribution of this research is to describe how Open Innovation is conducted within and around an automation-network.