The Dynamism between Technological and Product Innovation Capabilities in Low-R&D Industries : A Comparative Analysis of Mauritius Textile Firms

It is common knowledge that the nature of products is a crucial determinant of firms’ innovative activities. Thus products which are fairly unchanging in nature and embody low levels of innovations are viewed as being largely the result of process innovation as opposed to product innovation activities. This view is founded on the suggestion that their competitiveness is principally dependent upon shortened production cycles and cost reduction processes both forming the bases for standardization and mass-production. Hence, there seems to be a general consensus that the technological capabilities of firms which manufacture low-R&D products are a function of their process innovation activities. Consequently, it is unclear how significant product innovation activities are to the technological capability development of low-R&D firms. This paper addresses the above query within the context of Mauritius – a small industrializing country – and explores the dynamism between product innovation activities and the technological capabilities of textile firms categorized as (1) small-medium enterprises and large enterprises and; (2) domestic enterprises and subsidiaries of multinational enterprises. The study shows that, contrary to what is generally accepted, product innovation capabilities are as crucial as process innovation capabilities in the overall development of low-R&D firms’ technological base