Barriers to product innovation: An empirical study in Portuguese services SME

Abstract

This study aims to explore the relations between financial, knowledge and market barriers to innovation and the innovation propensity of the Portuguese SMEs services sector, specifically at the product level. Utilizing data from the Community Innovation Survey (CIS) covering the years 2018-2020, the analysis focuses on a sample of 9238 companies within the service sector, each employing between 10 and 249 individuals. The research employs a logistic regression model to assess these relationships. The findings highlight that some obstacles, such as insufficient credit or private investment and restricted access to external knowledge, are perceived as hindrances to product innovation. Interestingly, some barriers to innovation, such as the lack of skilled personnel and elevated costs, can paradoxically serve as catalysts for innovation.