Abstract
Researchers have proposed that scarce resources are the main factor hindering product innovation in small companies. However, despite scarce resources, small companies do innovate, so the research question is: How do small companies manage resource scarcity in product innovation? To answer the research question a multiple case study of three small established companies and their product innovation was used, including interviews and observations over a period of five months. The small companies were found to use many different bootstrapping methods in combination within their product innovation. The methods can be classified into three different functional categories: bootstrapping methods for increasing resources, for using existing resources more efficiently, and those for securing a fast payback on resources put into product innovation. Due to their resource scarcity, the studied companies also favoured an innovation strategy only involving new products done with known technology and targeting existing markets. This strategy seems to avoid unsuccessful innovation but at the same time exclude technologically radical innovation.
Highlights
It is generally known that small companies have scarce resources, a situation that Adams (1982) and Rothwell and Dodgson (1994) propose hindersThis is an Open Access article published by World Scientific Publishing Company
Most resources go into operational processes, such as production and sales, that are needed to run to uphold the cash flow
The company has a history of abandoning product innovation due to lack of resources and lack of customers to support the development work and buy the new product in the end
Summary
It is generally known that small companies have scarce resources, a situation that Adams (1982) and Rothwell and Dodgson (1994) propose hinders. This is an Open Access article published by World Scientific Publishing Company. Small companies do product innovation (Vossen, 1998; SCB, 2016). This study aims to contribute new knowledge to small business research and innovation management by investigating how small companies manage resource scarcity regarding personnel, knowledge and capital in their product innovation Where do the resources come from and how are they used within product innovation? This study aims to contribute new knowledge to small business research and innovation management by investigating how small companies manage resource scarcity regarding personnel, knowledge and capital in their product innovation
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