Small manufacturing and service enterprises as innovators: a comparison by size

Purpose – This paper aims to focus on innovation development in enterprises with fewer than 50 employees. It explores differences in innovation capacity and in the diversity of developed innovations across the four enterprise size categories within the small manufacturing and service enterprises. Design/methodology/approach – The empirical evidence is based on quantitative data gathered through an e‐mail questionnaire, which yielded 708 responses from the representatives of Finnish small enterprises. The analysis is based on non‐parametric tests. Findings – The findings display a broad diversity of innovation patterns among small enterprises. The evidence identifies differences and similarities in innovation capacity and innovation development across the different size categories within the manufacturing and service sectors. Finally, a summary of the characteristics of small enterprises as innovators across size categories is provided. Research limitations/implications – This paper studies innovation patterns based on innovation capacity and developed innovations. There is a need to study how innovation capacity has been transformed into innovations; thus, the innovation process should be included in the examination. Practical implications – At a public policy level, the results of this study give ideas for encouraging innovation development in small enterprises. The evidence suggests that there are significant discrepancies between the enterprises as innovators. It should be acknowledged that small enterprises comprise several divergent target groups for policy making. Originality/value – This study makes a contribution to academic literature by crystallizing the relationship between the size of an enterprise and innovation development. Applying these results will provide more specific questions for studying the nature of innovation development in small enterprises.