Motivation for innovation in small enterprises

Abstract

This study examines which factors motivate small enterprises to realise product innovations and how these factors affect their innovation processes. In a multiple embedded case study of three small enterprises, 11 different innovation processes, both realised and unrealised, were discovered and analysed. Strategy, competition, profit, growth, source of innovation idea, innovation process size and novelty were not found to explain the motivation to innovate, but ten interdependent motivating factors did, of which four externally oriented factors were found conclusive for innovation to occur. The factors found, dealing with resource scarcity, technology and market uncertainty and risk, and cash flow, highly affected how the innovation processes were carried out. The findings further show that the need to maintain steady cash flow seems to be the overall motive for product innovation in small enterprises.