Fostering Innovative SMEs in a Developing Country: The ALI Program Experience

Abstract

Small and medium enterprises (SMEs) play an essential economic role through income and employment generation as well as reducing inequalities. In this regard, continuous innovation is a pillar for guaranteeing SMEs’ survival worldwide. In Brazil, the ALI Program (Portuguese acronym for Local Innovation Agent) trains groups of SMEs to implement a continuous innovation process based on agile methodologies. This paper applied focus group methodology to investigate whether, after participating in the program, SMEs practice some innovation processes in their business and the difficulties perceived by entrepreneurs in incorporating innovation processes into their ventures. Based on the extant literature and on the focus group, it was observed that SMEs see innovation as a risk, fear innovating because of tradition, family, and/or generational context, and do not see innovation as a process suitable to be systematized with agile tools. In addition, factors such as the age of the SMEs’ leaders, the age of the SMEs, the gender of the SMEs’ leaders, and the nature of the SMEs (family business or not) may affect their openness to innovation. Recommendations are stated for practitioners (such as ALIs) to improve their training quality, policymakers to improve and create similar programs, and researchers interested in future research directions.