Going Deeper into SMEs’ Innovation Capacity: An Empirical Exploration of Innovation Capacity Factors

Abstract

This study explores innovation capacity in the specific context of SMEs. Innovation capacity is particularly hard to define in SMEs, as most of their innovative activities are informal and merge into overall firm activities. The objective is to propose a framework for analysis that delves deeper into SMEs’ innovation capacity, based on SME specificities. This framework is built on theoretical insights from the entrepreneurship and innovation literature, combined with empirical insights from an in-depth qualitative multiple case study, based on thirty-two innovative SMEs. Our findings confirm and discuss ten critical dimensions of SMEs’ innovation capacity previously highlighted by the literature and reveal four new dimensions. These findings allowed us to propose a new framework to analyze SMEs’ innovation capacity based on SME specificities.JEL Codes: O32, O33

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