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This study increases knowledge on SMEs as extended enterprises, particularly from the viewpoint of stakeholder involvement in firms’ R&D activity. Previous research holds that stakeholder involvement benefits firms’ R&D performance, but tends to approach stakeholder involvement by focusing on one or two stakeholder groups at a time. This paper explores the roles and intensity of involvement of different stakeholders in the R&D processes of SMEs and presents a 360-degree model based on prior research to empirically profile the SMEs to see where their gaps in the stakeholder potential are. The study was conducted with multiple qualitative case studies and contributes to the debates on SMEs’ R&D processes and stakeholder perspective on business. This research offers a synthetizing view of the involvement of different stakeholders’ in R&D, an approach that enables to consider SMEs as extended enterprises.

Conducting innovation activities receives increasing attention in SMEs. These activities can be formalized in the product development processes (PDPs), but especially challenges in PDPs affect the SMEs’ innovation capability (IC). Based on a thorough understanding of these challenges, we aim at improving the SMEs’ IC. We address our research question ‘what are the current challenges in PDPs of SMEs?’ with conducting in 13 SMEs semi-structured in-depth interviews with CEOs, innovation managers, and heads of R&D. We identify 30 challenges, aggregated in the themes: iteration, decision making, and stakeholder involvement. While our results extend recent literature regarding current challenges in PDP, they also reveal the SMEs’ needed for effective means to tackle their challenges, and in turn to enhance their IC.