Abstract
ABSTRACT Various groups of innovating German small and medium enterprises (SMEs) are identified according to their use (or nonuse) of in-house research and development (R&D), their reliance on external sources of knowledge, and the degree of interactive learning within the firm that they employ. Our findings confirm that SMEs can compensate for a lack of R&D by placing a strong emphasis on internal and external interactive learning, at least to some degree. Another observation is that each learning mode is likely to positively affect company performance. Hence, in large parts of the SME sector, it is economically rational to follow a non-R&D-oriented mode of learning and innovation. The article concludes with some policy implications.
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