Innovation Practice and its Performance Implications in Small to Medium Enterprises (SMEs): A Resource-Based View,

Abstract

Small and medium enterprises (SMEs) in the manufacturing sector make a significant contributionto economic growth, yet most of the research into innovation management in the manufacturingsector has focused on large organizations. This article, however, identifies innovation driversand their performance implications in manufacturing SMEs. Its study gathered survey data froma sample of 600 Australian SMEs and found that SMEs are similar to large firms with respect tothe way that innovation strategy and formal structure are the key drivers of their performance,but do not appear to utilize innovation culture in a strategic and structured manner. This studytherefore concludes that SMEs’ performance is likely to improve as they increase the degree towhich they mirror large manufacturing firms with respect to formal strategy and structure, andto which they recognize that innovation culture and strategy are closely aligned throughout theinnovation process.