Innovation In SMEs Research Articles

THE PIVOTAL ROLE OF TOP MANAGEMENT IN FOSTERING INBOUND OPEN INNOVATION IN SMEs: THE MEDIATION EFFECT OF ORGANISATIONAL CHANGE

This study aims to investigate the pivotal role of top management and organizational change in explaining the degree of openness of SMEs to inbound open innovation practices. To do this, a conceptual model has been proposed and tested from a sample of 186 SMEs operating in Tunisian manufacturing industry. The examination of this model based on the Structural Equation Modeling confirms that entrepreneurial strategic vision of the top management favorably influences the degree of openness in SMEs. Moreover, the results obtained showed that organizational change associated with cultural aspects is an important determinant in the introduction of inbound openness practices, while that related to the organizational structure seems to be insignificant. Based on these findings, this research paper contributes to the enrichment of knowledge on inbound open innovation in SMEs and produces some managerial implications that can be suggested to stimulate the success of the openness approach according to the Open innovation paradigm.

How Do SMEs Survive Institutional Voids? The Role of Innovation (WITHDRAWN)

Economies fall short to varying degrees in providing the institutions necessary to support market mechanisms. These limitations, known as institutional voids, are generally thought to reduce the effectiveness and performance of firms operating in such environments. To explain how firms, deal with institutional voids, scholars have pointed to various strategies such as corporate social responsibility (CSR), internalization, information substitution, institutional borrowing, and signaling. These resource-intensive strategies are utilized primarily by very large firms. SMEs have limited resources that reduce their degrees of freedom for enacting such complex strategies. Given the significant contribution of SMEs to worldwide businesses, employment as well as national income, particularly to the emerging economies, it is important to understand their strategies in overcoming institutional voids. We suggest that SMEs will be more likely to undertake innovation to deal with institutional obstacles. Findings highlight the importance of innovation for SMEs even in environments thought to have less developed innovation-supporting systems. The connections we demonstrate between SMEs, institutional voids and innovation are new to the literature.

Paths to Success: How Does Entrepreneurial Orientation Enhance Product Innovativeness of SMEs?

This study aims to examine the roles of technology diversity capability and intellectual property (IP) protection capability in mediating the relationship between entrepreneurial orientation (EO) and product innovativeness of SMEs. Based on survey-based data from 119 Taiwanese SMEs, this study finds that EO can enhance product innovativeness of SMEs indirectly through the development of technology diversity capability and IP protection capability. This study also finds that market uncertainty negatively moderates the relationship between EO and IP protection capability. In addition, market uncertainty positively moderates the relationship between technology diversity capability and product innovativeness, while it negatively moderates the relationship between IP protection capability and product innovativeness. This study enriches the body of knowledge in SMEs and product innovativeness literature.

Government intervention, internal control, and technology innovation of SMEs in China.

Under the innovation-driven development strategy, the improvement of the core competitiveness of enterprises demonstrates increasing dependence on the ability of technological innovation. In this article, data of A-share listed companies in Shanghai and Shenzhen stock markets from 2008 to 2018 were selected as research samples for the analysis of the influencing factors and mechanism of enterprise technological innovation from the dual perspectives of the external economic environment and internal management system based on the use of the fixed-effect model. The results show that government intervention significantly hinders enterprises' investment in resources for technological innovation, and less government intervention can improve the innovation investment of enterprises. The intervention of internal control fails to bring institutional advantages; rather, it aggravates the negative effect of government intervention on enterprise technological innovation. The research enriches the existing academic research results on government intervention, internal control quality, and enterprise technological innovation. The findings provide experience for accelerating the marketization process in China, enterprise governance, and improving the level of enterprise technological innovation.

Institutional Voids and Innovation

Economies fall short to varying degrees in providing the institutions necessary to support market mechanisms. These limitations, known as institutional voids, are generally thought to reduce the effectiveness and performance of firms operating in such environments. To explain how firms, deal with institutional voids, scholars have pointed to various strategies such as corporate social responsibility (CSR), internalization, information substitution, institutional borrowing, and signaling. These resource-intensive strategies are utilized primarily by very large firms. SMEs have limited resources that reduce their degrees of freedom for enacting such complex strategies. Given the significant contribution of SMEs to worldwide businesses, employment as well as national income, particularly to the emerging economies, it is important to understand their strategies in overcoming institutional voids. We suggest that SMEs will be more likely to undertake innovation to deal with institutional obstacles. Findings highlight the importance of innovation for SMEs even in environments thought to have less developed innovation-supporting systems. The connections we demonstrate between SMEs, institutional voids and innovation are new to the literature.

Breaking Down Innovation: The Influence of CEO Overconfidence on New Product and Process Development

Firms with overconfident CEOs engage more in innovation and have more innovative success compared to firms with rational CEOs. However, the relation between CEO overconfidence and different types of innovation is unclear. It is important to differentiate between product and process innovation because both have distinct characteristics and are associated with different strategies. Building on the upper echelons perspective, we develop and empirically investigate theory on how CEO overconfidence relates to product and to process innovation. We find evidence that CEO overconfidence relates more strongly to product than to process innovation. With regard to environmental characteristics, our research shows that the relation between CEO overconfidence and product innovation is stronger in industries with low R&D intensity. Our study offers multiple contributions. First, we contribute to the literature on firm managers and innovation by differentiating between types of innovation, specifically product and process innovation, and integrating the implications of industry R&D intensity. Second, we advance the upper echelons perspective by comparing how CEO overconfidence relates to product and process innovation. Third, we transfer research on overconfidence and innovation to SME environments and identify CEO overconfidence as antecedent of SME innovation.

Determinants and consequences of SME insolvency risk during the pandemic

The COVID-19 pandemic posed an existential threat to European SMEs' financial resilience with significant consequences for the European economy. Using unique firm-level data on SME financing conditions, this paper proposes a new insolvency risk measure based on survey responses. We show that SME insolvency risk increased, on average, by approximately 21% during the pandemic. Problems with finding customers and the cost of production and labor contributed notably to SME insolvency risk during this period, and SMEs also saw deterioration in their access to finance. Innovation worked as a mitigating factor during the pandemic, and innovative SMEs were more resilient, maintained their client base, and saw favorable access to bank lending. Our results point out that SME innovation can prevent the number of insolvencies from rising significantly in the long term.

The Role of Digital Innovation in SMEs: A Financial Performance Perspective

This research identifies the driving factors of SMEs' digital innovation and their effects on improving SMEs' financial performance during the COVID-19 pandemic, intending to discover the mediating role of digital innovation in improving SMEs' financial performance through innovation orientation, IT readiness, and digital capability. The type of research is quantitative with a sample of 188 SMEs actors in Surakarta and its surroundings who have adopted e-commerce and fintech, with SEM-PLS modeling analysis. The results show that digital innovation has an important role as a mediator for the variables of digital orientation, IT readiness, and digital capability that affect the improvement of SMEs' financial performance during the COVID 19 pandemic. SMEs that carry out digital innovation through e-commerce and fintech have increased financial performance compared to previously, this was seen from the percentage increase in sales and profits compared to the previous one. This research gives contribution to the new knowledge about the digital innovation of SMEs, the new conceptual framework that connects digital innovation with business performance from the perspective of financial performance. The significant positive effect of digital innovation on improving financial performance shows that it is important for small enterprise to improve their digitization skills and knowledge in business development to fulfill customer needs and improve performance for future business sustainability

Open Innovation Strategies and SMEs’ Performance: The Mediating Role of Eco-Innovation in Environmental Uncertainty

Abstract The current increasing topic around empirical study is environmental issues. Several previous studies examined how open innovation strategies could affect eco-innovation amid research debates about environmental conservation in corporate innovation. This study aims to prove the effect of open innovation strategies on creating eco-innovation to affect SMEs’ sustainable competitive advantage and performance empirically. This study developed and empirically tested the mediating role of eco-innovation on sustainable competitive advantage and performance. A quantitative approach in testing the empirical research model was implemented. A total of 223 SMEs in the batik sector in Yogyakarta were examined. We used purposive sampling approach to select the research sample. The criteria used in the sampling is SMEs batik which has been operating for three years or more. The results revealed that open innovation strategies significantly positively affected eco-innovation while eco-innovation significantly positively affected competitive advantage and SMEs performance. Environmental uncertainty strengthened the eco-innovation relationship on competitive advantage, but not on the SMEs’ performance.

Open innovation in SMEs a bibliometric literature review using VOSviewer

Purpose – The focus of this study is to evaluate the features of open innovation using data accessed from the Scopus online database. We are looking at two keywords: open innovation and SMEs. Design/methodology/approach – The study measured a bibliometric analysis of 1,214 articles from 157 journals during 2007-2020. Findings: The findings showed that the publication trend on open innovation kept increasing. The most cited article was Open Innovation in SMEs: Trends, Motives, and Management Challenges by Van de Vrande with 1,107 citations, followed by Lee et al. with 699 citations. The publication journal with the highest citation was Technovation and Research Policy. The United Kingdom and Italy were in the top-ranking countries for publications on this topic. The document citation category showed that Belgium ranked the highest with 1,990, followed by the Netherland with 1,212. Research limitation/implications: This study provides a literature search on open innovation and has several limitations that require future study recognition. These limitations include that databases are limited to sources originating from one database only in data collection and data synthesis. Practical implications: The practical implications provide benefits about open innovation, which can help SMEs understand open innovation and apply it as their preferred strategy in developing business. This study also allows SMEs owners and managers to understand open innovation as a strategic choice to consider as the concept is a part of the strategic intervention for their business. Originality/value: This study provides the most influential contribution and impact on the research interest of open innovation that develops from various fields, including leading researchers and their home countries. Second, a co-citation analysis addressed the second question in this research study.

The determinants of smes’ firm performance in lampung province, indonesia

This study aims to study the influence of the Strategic Orientation of Entrepreneurship and Organizational Culture on Innovation, and its implications for the performance of Micro, Small and Medium Enterprises. This research is a conclusive research conducted through data collection using descriptive and causality surveys. This research was conducted with a sample of 420 micro, small and medium enterprises in Lampung Province, Indonesia. The results of this study are the Effect of Mediation on Innovation Increasing the Effect of Entrepreneurship Strategic Orientation and Organizational Culture on the Performance of Small and Medium Enterprises. The results of this study generally have an influence on the Strategic Orientation of Entrepreneurship and Organizational Culture on the Performance of SMEs. The seven hypotheses proposed in this study are all acceptable. Organizational Culture as an independent variable has the strongest influence on SME Innovation and Performance. This dissertation also provides a discussion of the findings and limitations, theoretical and practical contributions, theoretical and managerial implications of research, and suggestions for future research.

CEO characteristics and the Doing-Using-Interacting mode of innovation: a new upper echelons perspective

ABSTRACT Little is known about how, and through which characteristics, CEO effects DUI mode innovation activities in SMEs. Thus, we connect the DUI mode concept with business management research and use data from 40 qualitative interviews in German non-R&D-based, but innovative SMEs. Applying the upper echelon concept as an analytical framework our results show that the CEO acts as an important moderator and mediator between DUI learning mechanism and innovation performance. In particular CEO’s values and cognitive base may help to increase innovation activities of the employees. Our paper is the first that empirically applies CEO’s psychological attributes of the upper-echelons concept to DUI innovations in non-R&D SMEs. We have developed a new version of the upper echelons model as well as hypotheses gained from the qualitative data analysis that are ready to be tested with quantitative procedures to improve the upper echelons theory concerning DUI-led innovation processes in SMEs.

Factors Influencing 4.0 Technology Adoption in Manufacturing SMEs in an Emerging Country

Purpose By considering the lack of studies of the factors that influence the adoption of 4.0 technologies in manufacturing SMEs, this study proposes a model that examines the aspects that motivate, benefit and obstruct the implementation of emerging technologies, as well as the role of the institutional environment, for a developing country. Methodology A qualitative approach and interview method were used to study 4.0 technologies in the “core” productive processes adopted in 25 SMEs. The gathered data were analysed and processed in NVivo 12 software. Results Two groups of categories (nodes) were obtained, within which related subcategories (subnodes) were located. These two groups are existing and emerging categories, which reflect the aspects that motivate, benefit and obstruct the adoption of 4.0 emerging technologies. Conclusions The identification of an emerging variable in the study of inhibitors and facilitators of the adoption and implementation of 4.0 technologies is a valuable contribution because it allows us to account for the problematisation of financing as an important variable in the processes of introduction into Industry 4.0 for SMEs. This proposal may facilitate public policies at regional and national level to promote and advance in this area of innovation for SMEs.

The Effect of Outward and Inward Internationalisation on Different Types of Innovation: Evidence from UK SMEs

This paper empirically examines the effect of outward internationalisation, inward internationalisation activities and outward-inward internationalisation (i.e., exporting and importing) on different types of innovation undertaken by UK SMEs. Specifically, we differentiate between product innovation and process innovation and examine the potential effect that they can generate individually and in combination. The results show that both inward and outward internationalisation support product and process innovation in SMEs. However, such an effect is found to be stronger for the combined outward-inward internationalisation operations than for the single mode undertaken by SMEs. The results are found to be robust across the different types of innovation. However, sub-sample analysis shows that, although innovation responds to different internationalisation operations in micro and small firms, for medium-sized firms, only the combination of outward and inward internationalisation operations increases the probability of undertaking both innovations. Using the organisational learning theory, we argue that engaging in both internationalisation activities simultaneously enables firms to acquire a more diverse and richer set of knowledge and key information — through double loop learning, which is translated into increased levels of innovation. Hence, our results have important theoretical, managerial, and policy implications and stimulate the existing debate in the area.

How Efficiently Does the EU Support Research and Innovation in SMEs?

The European Regional Development Fund devoted around 66 billion Euros to the financial support of innovation and productivity in European enterprises over the 2014–2020 programming period. In this framework, we assessed the implementation of the Operational Programmes dedicated to fostering research and innovation, particularly in small and medium-sized enterprises. With this aim, we used a network slack-based data envelopment analysis model paired with cluster analysis that encompasses a multitude of performance framework indicators to assess 53 Operational Programmes from 19 countries. Our findings suggest that compared to transition and less developed regions, more developed regions present a higher room for improvement. Also, less developed regions present a better performance when they employ their funding against more developed regions, suggesting that further funding should be channelled for leveraging research and innovation in the former regions. Finally, Operational Programme managers should focus on solving the problems both inherent to the poor outcomes in terms of enhancing the number of researchers working in improved research infrastructures and promoting the technology transfer between research institutions and enterprises.

Business Model Innovation and exaptation: A new way of innovating in SMEs

Although research underlines the need for SMEs to innovate their Business Model, they face considerable challenges in exploring external business opportunities and experimenting/developing their available resources in unexpected ways. We posit that one way that SMEs can innovate their Business Model is through exaptation, a discontinuous evolutionary process that allows utilizing and adapting existing resources in new application domains. Using a case study approach, we investigate the case of a SME that has successfully innovated its Business Model through exaptation. We then discuss how three key exaptation processes lead to value creation, delivery and capturing, thus supporting Business Model Innovation in SMEs.

Value Creation and Firm Innovativeness of Small and Medium-Sized Enterprises in Ogun State, Nigeria

Background: Small and medium-sized enterprises are globally viewed as an important force driving economic development and employment creation in both developing and developed countries, which is well acknowledged. However, the performance of SMEs in developed and developing economies has been slow and in some cases even collapsed due to a number of challenges such as the inability to respond to rapidly changing market demand, technical advancements, and capacity constraints related to knowledge, innovation and creativity all of which have negatively impacted on SMEs' performance leading to inability to sustain SMEs competitive advantage, decline in sales-growth, profitability and reduced innovative-capability. Extant studies have attempted to elucidate on the challenges of SMEs and the attendant supposed solutions, conversely, most of the extant research focus more on developed countries than developing countries such as Nigeria.
 Purpose: This study examined the effect of value creation on firm innovativeness of small and medium-sized enterprises in Ogun State, Nigeria.
 Methodology: The study adopted a survey research design. The population was 2,465 registered small and medium scale enterprises in Ogun State, Nigeria. A sample size of 432 was determined using Cochran formula. Proportionate stratified sampling technique was adopted. A validated questionnaire was used to collect data. Cronbach’s alpha reliability coefficients for the constructs ranged from 0.79 to 0.92. The response rate was 87.9%. Data were analyzed using descriptive and inferential statistics. 
 Findings: Findings revealed that value creation components had significant effect on innovativeness (Adj.R2 = 0.792; F (3,407) = 522.888, p < 0.05). The study concluded that value creation had a significant effect on firm innovativeness of SMEs in Ogun state, Nigeria.
 Recommendation: The study recommended that value creation components enhanced small and medium enterprises’ innovativeness and therefore, owners/managers should continually create value in other to enhance SMEs innovativeness.

GIP Evaluation and Path Improvement of Technological SMEs Based on Digital Information Technology

Small and medium-sized technology-based SMEs also play a certain role in promoting the economic development and social progress of a country and can provide relative social resources. However, under the wave of green development, green technology innovation for SMEs is also important, which is of great significance to the sustainable development of enterprises. This paper summarizes the situation of a certain stage of Chinese enterprises’ green technology innovation and builds a GIP evaluation index system suitable for small and medium-sized technology-based enterprises. This paper selects Z province for analysis and uses data envelopment analysis and Malmquist index analysis to analyze the GI situation of 11 cities in Z province. And this paper proposes a green innovation performance (GIP) evaluation path for technology-based SMEs. The results show that the overall green innovation (GI) level of Z province shows an upward and progressive trend from 2016 to 2020, and the total factor productivity change index (TPF) in the overall period from 2018 to 2020 is 0.913. The overall GIP of enterprises in cities C and D in Z province is insufficient and needs to be further expanded.

Success factors of innovative marketing management for SME / Start up entrepreneurs of Thailand herbs

This research aims to study the levels of organizational innovation (OrgInno), Marketing Innovation (MarInno), Innovative Marketing Management (MarMan), and Thailand herbal SME/Startup Entrepreneurial Success (EntSuc), the effects of OrgInno, MarInno, and MarMan on OprSuc, including create a success model of Thailand herbal SME/Startup entrepreneurs. The sample was 360 executives of herbal SMEs/Startups in Thailand. Multi-stage random sampling used in the study consisted of stratified random sampling, based on herbal registration, and simple random sampling. The results found that OrgInno had a direct effect on MarInno, MarMan, and EntSuc. MarInno, besides, had a direct effect on MarMan and EntSuc. MarMan, moreover, has a direct effect on EntSuc. Finally, OrgInno, MarInno, and MarMan can jointly predict EntSuc. Therefore, the findings suggest that the related government agencies could use these results to organize training program on technological development and innovation for SMEs to enhance their competitiveness and increase their opportunities to access more funding sources.

CEO satisfaction and SME innovation: unveiling the role of family involvement

ABSTRACT Family involvement in SMEs can affect strategic decisions about innovation. The differences in the innovative behaviours between family and nonfamily SMEs are mostly attributed to socioemotional wealth, which emphasizes the noneconomic goals of family firms. The literature on how family involvement affects firm innovation remains inconclusive. In this study, we distinguish the different steps of innovation and use CEO satisfaction with business performance to show that greater family involvement is ultimately good for innovation performance. We examine how CEO satisfaction with business performance affects firm innovation and, in particular, how family involvement affects this relationship. Using a sample of 308 Czech SMEs and multiple mediation and moderated mediation analyses, we find that high levels of family involvement enhanced SMEs innovation performance by strengthening the influence of CEO satisfaction on product innovation.