A journey of a small enterprise from a non-innovator to a diversified innovator.

What is it about?

This paper focuses on innovation development in small enterprises. It explores what kinds of innovations have been developed in small enterprises and what is the diversity of innovation types. In addition, this paper examines the features characterising the journey of a small enterprise from a non-innovator to a diversified innovator. The empirical evidence is based on quantitative data gathered through an e-mail questionnaire, which yielded 733 qualified responses from the representatives of Finnish small enterprises with fewer than 50 employees. The results suggest that the degree of innovation capabilities, R&D investments and profitability are associated with the diversity of developed innovation types. The findings display four alternative routes when a small enterprise moves from a non-innovator to a diversified innovator. Applying these results will provide more specific questions for studying innovation development in the smallest enterprises.

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Why is it important?

Despite their important role in an economy, innovation development in the smallest enterprises has received only scant attention. The majority of the studies are focused on medium-size and large enterprises in high-technology industries. This paper aims at contributing to filling the above gap. It explores innovation development in small enterprises with fewer than 50 employees.