Encouraging innovation in small and medium sized businesses: learning matters

Abstract

PurposeThe purpose of this paper is to find out whether any relationship can be found among learning orientation, learning culture in general and innovation achievements in SMEs.Design/methodology/approachIn‐depth research based on questionnaires and interviews was carried out. The sample was analyzed using multivariable correlation.FindingsIt is found that to the majority of SMEs innovation means product or technology innovation, and only a negligible minority think about management‐related innovation. There are few SMEs who encourage learning and act upon building a learning culture, but those who do are far more innovative than the rest. Those with a low interest in learning and building a learning culture perform poorly in innovation.Research limitations/implicationsInternational comparison would have been useful, especially in the region.Practical implicationsThe research has proved that an encouraging external environment and a supporting internal environment are equally important for successful innovation in SMEs. Therefore the government and the EU in general should support SMEs' innovation more successfully, and SMEs should put more emphasis on learning, knowledge creation and building of a learning culture.Social implicationsFor societies suffering from a high unemployment rate it is crucial to find sources for job creation. Innovative SMEs can be the best sources for new jobs.Originality/valueThe importance of learning, learning culture and knowledge creation for innovation in SMEs has been proved.