LAUSR

This study examines the innovation practises of service firms in one of the most promising emerging markets: Indonesia. The study highlights innovation strategies that Indonesian service firms employ, particularly, contrasting closed versus open innovation strategies, investigating the influence of innovation strategies on firm innovativeness and examining the impact of firm innovativeness on firm performance. The results reveal a significant shift towards open innovation, indicated by the increasing reliance on the external sources of innovation and the extent of external collaboration over the years. A higher degree of collaboration is shown by the degree of vertical collaboration (that is, collaboration with suppliers or customers) and knowledge-intensive collaboration (collaboration with universities or government). Open innovation strategy is found to have a positive effect on firm innovativeness; firm innovativeness further exerts a positive impact on firm performance, while firm size also influences the relationships.