Innovation in SMEs
If you are a small entrepreneur who likes to network, a spill-over benefit can be better innovation in your enterprise. “The role of networks in small and medium-sized enterprise innovation and firm performance’’ by Sarel Gronum, Martie-Louise Verreynne, and Tim Kastelle (http://onlinelibrary.wiley.com) uses longitudinal data from 1,435 Australian SMEs and shows that strong, heterogeneous ties improve innovation in SMEs.
The authors, however, hasten to add that unless networks are used for productive means, efforts to cultivate and maintain them may be wasteful.
“SME owners and managers should, therefore, utilise their limited resources in establishing diverse and strong network links in adopting an open innovation orientation.” Such network links, in the authors’ view, should be primarily directed at increasing innovation breadth, a mechanism that unlocks the performance value of networks.
For starters, the definition of innovation cited in the paper is from the Oslo Manual (OECD 2005), thus: “Innovation is the implementation of any new or significantly improved product (goods or services), operational processes (methods of production and service delivery), any new marketing methods (packaging, sales and distribution methods), or new organisational or managerial methods or processes in business practices, workplace organisation or external relations.”
The authors inform that the bulk of research on the impact of both innovation and networks on performance has been undertaken in
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