Narrow Results

We investigate the extent to which product innovation moderates the relationship between capabilities and competitive advantage among small and medium enterprises (SMEs). Using resource-based and capabilities theories, we examine capabilities as organisational routines, focusing on job rotation and multi-skilling. We examine competitive advantage by using logistic regression to assess the probability of top performance in productivity relative to most other firms in the same industry. Considering the path-dependence in developing capabilities and innovation, we use a longitudinal sample of 300 UK manufacturing SMEs in traditional and high-technology industries to evaluate the effects of innovating and using capabilities continuously over time. The results suggest that firms using job rotation or multi-skilling and introducing product innovations consistently from 2002 through 2004 are more likely to be top performers in 2004. The findings support a theoretical model according to which the association between capabilities and competitive advantage is moderated by innovation.

The knowledge protection/sharing dilemma related to innovation activities is becoming known to all firms, even though it is generally more notable for SMEs: the small size of the firms inherently creates a need for inter-organizational collaboration, but it also makes dealing with the related contradictories more challenging. One factor behind this is that the needed tools — such as the protection mechanisms of intellectual assets — may be more limited. In line with this notion, we examine the protection available for and used by small firms in their innovation activities. We approach the issue by conducting a review on the relevant literature, and use a qualitative multiple case study conducted in eight small companies to empirically study the issue. Departing from prior research, we consider protection of innovations by distinguishing between the intangibles needed in innovation activities and the actual innovation outputs, and combine these considerations to the knowledge protection/sharing dilemma.

Do SMEs cluster around different types of innovation activities? Are there patterns of SME innovation activities? To investigate we develop a taxonomy of innovation activities in SMEs using a qualitative study, followed by a survey. First, based upon our qualitative research and literature review we develop a comprehensive list of innovation activities SMEs typically engage in. We then conduct a factor analysis to determine if these activities can be combined into factors. We identify three innovation activity factors: R&D activities, incremental innovation activities and cost innovation activities. We use these factors to identify three clusters of firms engaging in similar innovation activities: active innovators, incremental innovators and opportunistic innovators. The clusters are enriched by validating that they also exhibit significant internal similarities and external differences in their innovation skills, demographics, industry segments and family business ownership. This research contributes to innovation and SME theory and practice by identifying SME clusters based upon their innovation activities.

The knowledge protection/sharing dilemma related to innovation activities is becoming known to all firms, even though it is generally more notable for SMEs: the small size of the firms inherently creates a need for inter-organizational collaboration, but it also makes dealing with the related contradictories more challenging. One factor behind this is that the needed tools — such as the protection mechanisms of intellectual assets — may be more limited. In line with this notion, we examine the protection available for and used by small firms in their innovation activities. We approach the issue by conducting a review on the relevant literature, and use a qualitative multiple case study conducted in eight small companies to empirically study the issue. Departing from prior research, we consider protection of innovations by distinguishing between the intangibles needed in innovation activities and the actual innovation outputs, and combine these considerations to the knowledge protection/sharing dilemma.

As intellectual property (IP) rights are costly and difficult to acquire and enforce, it is often argued that small and medium enterprises (SMEs) are disadvantaged in their ability to utilize IP rights (IPR). Semi-structured interviews are used to provide an understanding of the IPR use by private inventors and SMEs as compared to larger companies. Interviews show that, excluding large companies, the general knowledge of the global patent system and capabilities to operate with various IPRs is modest. Especially, private inventors have unjustified high expectations of economic benefits of patenting, and eventually, disappointment with IPR. Lack of knowledge and awareness in IP generation, protection, and utilization weakens the performance of SMEs with missing processes, lack of IP/IPR strategy, and poor management of complex patent information. A classification of companies based on their knowledgeability and experiences in IPR is proposed.