From automation to databased business models : digitalization and its links to innovation in small and medium-sized enterprises

In order to better understand the complex interplay between digital technologies, competences and innovation, the present paper examines the digitalization-innovation link in small and medium-sized enterprises (SMEs). Starting from a review of the fourth edition of the Oslo Manual, a qualitative content analysis (QCA) of interview data on innovating German SMEs is conducted to derive a category system that covers the multidimensional relationship between digitalization and firm-level innovation. Its empirical application shows the heterogeneity of innovating SMEs with regard to digitalization. While some SMEs are slow to find their way into digitalizing their innovation processes, others have started to use new digital technologies for efficiency reasons in the sense of "doing the same with less", while still others are aligning their entire business model with the requirements of digital environments based on the innovation principle of "doing something new". The paper concludes with implications for policy and research.