Interaction between innovation in small firms and their environments: An exploratory study

Abstract

Small food firms make up an important sector in the European economy and are particularly significant in rural areas where they are potential sources of employment and growth. Despite this, their behaviour as regards innovation has been relatively little studied to date. This exploratory investigation finds different types of innovative behaviours among small agro-food firms in peripheral regions and identifies some of the factors with which they are associated. The research reported here is based on a sample of 323 small and very small food and drink (hereafter "food") firms drawn from 11 regions in six European countries. The food industry is generally regarded as a mature, low-technology industry, but this study identifies different clusters of small food firms according to innovative behaviours. It finds that, although a substantial number of firms may be defined as non-innovators, by far the largest cluster of food firms is involved in multiple forms of innovative activity. Recent studies have demonstrated the complexity of the determinants of technological progress. This may be modelled as a learning process in which small innovative firms tend to draw on internal and external sources of expertise and are both influenced by and influence the broader socio-economic environment in which they operate. This study uses cluster analyses to identify four types of innovative behaviours and examines the factors influencing these. It takes first steps to incorporate both measures of innovative capacity at the firm level as well as of the local development environment in order to explore links between the innovative capacity of small food firms and the characteristics of their regional contexts.

Theoretical Foundations in Support of Small and Medium Towns

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The role of knowledge-intensive service activities on inducing innovation in co-opetition strategies: lessons from the maritime cluster of the Algarve region

“…According to Noronha Vaz, Cesário and Fernandes (2006), the transition from a closed regional environment to an open inter-regional system demands an evolution of economic activity from simple forms of activity branches into complex technological regimes. In such a dynamic system, technological learning, entrepreneurial strategies, coordination systems and institutions, and overall regional conditions are factors that determine firm attitudes to innovation.…”

Innovation and Regional Socio-Economic Development - Evidence from the Finnish Local Administrative Units (1)

“…Urbanization has a positive influence on innovativeness and, furthermore, urbanization attracts better educated employees to a region (Florida, 2005;Bettencourt et al, 2007). Highly qualified professional employees are attracted to economic opportunities and quality of life factors (Simmie et al, 2002;De Noronha Vaz et al, 2006), which are, in general, better in cities. Thus, larger cities are more inventive per inhabitant than smaller ones (Bettencourt et al, 2007).…”