Innovation processes in small and medium-size companies

Abstract

Innovation in small manufacturing companies often proceeds in an unstructured way. For the most part there is no previous well-defined plan. Small companies manage to introduce product and process innovations in a great variety of ways. The activities involved in the innovation process vary from one company to another, as does the total duration of the process. With product innovations, the market to which the companies orient largely determines how the innovation evolves. With process innovations, it is the novelty of the innovation that determines the mode of evolution. Next to the know-how invested in the company, sources of information in the business sector are particularly intensively used, such as customers and suppliers. The use of other sources depends strongly on the stage in the innovation process. These are the most important conclusions from an investigation that has been carried out under commission from the Dutch government. Its objective was to establish how innovation is accomplished in small companies and which sources of information are used at the successive stages of the innovation process.