Outsourcing of New Product Development - A decision Framework

Research on outsourcing normally focuses outsourcing of production and often uses largefirms as sample. Only a few studies address the outsourcing of knowledge intense activities asnew product development (NPD) and especially in a SME context. Our earlier research inSwedish SMEs indicates that outsourcing of NPD is frequent in SMEs and that there is a lackof knowledge on the phenomena. This article offers a theoretical framework for the outsourcing of NPD in SMEs and revealsthe results from a longitudinal case study carried out in four Swedish SMEs to understand therationales behind outsourcing of NPD. Results from the present study indicate that goodenough is the keyword for SMEs with limited resources. This means that it may be better togive priority to proximity and trust, and accept that the outsourcing partners have just goodenough knowledge rather than world class, as close and frequent contacts are crucial whenoutsourcing knowledge intense activities such as NPD.