Abstract
Research studies of SME innovation practice observe some common themes, such as an orientation towards networking, and some differences that may seem activity-related (e.g. production or service). In this paper we suggest the kinds of innovation activity undertaken by an SME will depend on their dominant business model and owner/enterprise attitudes, each one being moderated by purposeful networking. This is illustrated in our review of data from 50 case studies, where combining a CEO narrative analysis with secondary data on the nature of the firm has identified seven generic manufacturing business models. We observe these may be adopted singly or in combination to pursue a competitive advantage, and the dominant business model may change over time as new capabilities are developed and/or in response to market changes.
Highlights
Traditional studies of innovation often consider SMEs as a homogenous group, or may cluster them by traditional industry sector
Alexander and Childe (2013) considered the contribution of tacit knowledge transfer processes between universities and business to innovation within the businesses. They concluded that tacit knowledge transfer through face-to-face interaction is most successful, and that it is dependent upon the context, content and process of the knowledge transfer. This rings true in our studies as well, where we found that those SMEs who were more proactive in considering innovations to their substantive business model demonstrated a much greater involvement in external networks
We introduced the thought that viewing SMEs in terms of their dominant business model(s) may allow insights into their innovation orientation and we reviewed case study material collected from some 50 SMEs over the past decade or so
Summary
Traditional studies of innovation often consider SMEs as a homogenous group, or may cluster them by traditional industry sector (like services, manufacturing, agriculture). They were able to draw on decades of family experience running butchers shops They started making small goods and a cooked smoked chicken product as a sideline. These proved so popular, Moira Macs established a small manufacturing facility. There are strategic partnership arrangements with two other large firms Through this partnership, Moira Macs established contacts in the large retail sector, where the firm started promoting its own brand products more actively over the past decade. The firm is an active member of a regional poultry cluster group that works cooperatively on specific projects
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