Process innovation strategy in SMEs, organizational innovation and performance: a misleading debate?

Process innovation strategy in SMEs, organizational innovation and performance: a misleading debate? This article contributes to the study of process innovation as a growth strategy for SMEs, enriching and complementing the well-researched debate about product innovation. Thus, under-researched process innovation strategies are analyzed, and their antecedents and innovative performance implications explored. The results show that process innovation strategy is mainly shaped by the acquisition of embodied knowledge, which acts as a key mechanism for countering firms’ weak internal capabilities. As process innovation is mainly production oriented, performance consequences are measured using the production process indicators of cost reduction, flexibility and capacity improvement, avoiding traditional misguided measures based on sales, which are more product oriented. Drawing on information for 2,412 firms taken from Spanish CIS data, our results suggest that R&D efforts are not positively related to production process performance, but that the latter is improved by the synchronous co-adoption of organizational and technological innovation. SMEs conducting a process innovation strategy rely heavily on the acquisition of external sources of knowledge in order to complement their weak internal innovative capabilities, and their pattern of innovation shows clear-cut differences from traditional R&D-based product innovation strategies. The article uses a resource-based view framework to generate hypotheses. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Small Business Economics Springer Journals

Process innovation strategy in SMEs, organizational innovation and performance: a misleading debate?

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Publisher
Springer US
Copyright
Copyright © 2014 by Springer Science+Business Media New York
Subject
Economics / Management Science; Management/Business for Professionals; Microeconomics; Entrepreneurship; Industrial Organization
ISSN
0921-898X
eISSN
1573-0913
D.O.I.
10.1007/s11187-014-9567-3
Publisher site
See Article on Publisher Site

Abstract

This article contributes to the study of process innovation as a growth strategy for SMEs, enriching and complementing the well-researched debate about product innovation. Thus, under-researched process innovation strategies are analyzed, and their antecedents and innovative performance implications explored. The results show that process innovation strategy is mainly shaped by the acquisition of embodied knowledge, which acts as a key mechanism for countering firms’ weak internal capabilities. As process innovation is mainly production oriented, performance consequences are measured using the production process indicators of cost reduction, flexibility and capacity improvement, avoiding traditional misguided measures based on sales, which are more product oriented. Drawing on information for 2,412 firms taken from Spanish CIS data, our results suggest that R&D efforts are not positively related to production process performance, but that the latter is improved by the synchronous co-adoption of organizational and technological innovation. SMEs conducting a process innovation strategy rely heavily on the acquisition of external sources of knowledge in order to complement their weak internal innovative capabilities, and their pattern of innovation shows clear-cut differences from traditional R&D-based product innovation strategies. The article uses a resource-based view framework to generate hypotheses.

Journal

Small Business EconomicsSpringer Journals

Published: Feb 26, 2014

References

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