Nawarathna, W.D.G.A.N.2021-10-042021-10-042015UWU/ENM/1 5/035http://www.erepo.lib.uwu.ac.lk/bitstream/handle/123456789/7042/ENM%2015%20035-02032021124111.pdf?sequence=1&isAllowed=yOpen innovation leads in the firms to use external knowledge for the firm innovation process. In this dynamic environment, the use of external knowledge to accelerate innovation practices is vital for organizations. A large number of small and medium apparel firms established in Sri Lanka and contribute to developing the economy. Furthermore, small and medium firms are facing challenges in adapting the open innovation practices due to the small in nature and have limited resources for introducing the innovation effectively in the market. Even those, face those challenges firms are engaging with open innovation for developing the firm innovation process. The main objective of this study was assess the degree of applying open innovation practices within small and medium apparel firm and sub objective was identify challenges of open innovation within the small and medium apparel sectos. This research study accomplished those objectives by gathering the primary data through an in-depth interview from 12 small and medium apparel firms in the Western province in Sri Lanka by using convenience sampling method. Further, data analysis was done using thematic data analysis method. The study found that the small and medium enterprises are applying the open innovation practices through customers' involvement, suppliers' involvement, competitors' involvement, and strategic alliance. Additionally, this research found the internal and external challenges of open innovation. The research finding will support to create the platform which connected external parties and provides the awareness of the open innovation practices. Finally, the further researcher can conduct their research identifies the management involvement of the practicing open innovation to develop firm innovation practices. Keywords: Open innovation, Closed innovation, Small and medium firm, Apparel sector, External ideasenEntrepreneurship And Management Degree Programme (ENM)Thesis