Enhancing new product development capabilities of small- and medium-sized enterprises through managerial innovations

Abstract

This essay aims at finding empirical evidence on which types of managerial innovations actually promote new product development (NPD) capabilities of small- and medium-sized enterprises (SMEs). We built this study upon empirical data derived from 650 German SMEs that took part in the Community Innovation Survey (CIS) 2011. We applied principal component analysis (PCA) to detect three different NPD capability factors. Our findings indicate positive effects of the following two types of managerial innovations: innovations in organisational procedures and in organisational forms. The results imply that the best bet for SMEs aiming at improving capabilities that are important for the first phases of NPD are changes in their organisational procedures. On the other hand, firms gearing toward advances in the final phases of NPD should concentrate internal changes on their general work organisation. Our paper demonstrates that SMEs can actively reinforce their NPD capabilities by implementing the right changes in their organisations.