Technological innovations and its influence on the growth of auto component SMEs of Bangalore: A case study approach

Abstract

This paper describes the nature and dimensions of technological innovations leading to the development and introduction of new products and market expansion along with enterprise growth with reference to three auto component SMEs of Bangalore in India. The study brings out that the entrepreneurs played an instrumental role in recognizing market opportunities, building up crucial in-house technological capability, supplement it with appropriate external assistance to carry out technological innovations including its modifications to suit customer requirements and finally deliver it to the market. An important feature of these innovations is that constant interaction with its customers is in-built into the system. As a result, all the three SMEs could achieve successful product innovations which led to their gradual growth over time in terms of employment, investment and more importantly in terms of sales turnover. Further, by stringing the inferences of the three cases a theoretical construct of the growth of innovations in SMEs in three stages of their development – start-up and stabilizing, building technological credibility and opening up of new markets – is proposed. These stages are (i) attaining design standards, (ii) incremental innovations, and (iii) ushering radical innovation.