THE ROLE OF COMPLEMENTARY ACTORS IN THE DEVELOPMENT OF INNOVATION IN SMALL FIRMS

This study examines the findings of a survey of small, high innovator firms and their assessment of the risks and benefits of forming strategic alliances with third party "complementors". The study found that the entrepreneurs of these small innovator firms were willing to form strategic alliances where such collaboration would assist in reducing customer perceptions of risk in the adoption of their innovation, while also enhancing the customer's understanding of the innovation. However, the entrepreneur of the small firm also needed to be confident that the alliance would allow him or her to retain control over the quality of the final outcome to their customer. These findings suggest that education of the entrepreneur in the development and management of strategic networks may be a useful enhancement to the process of innovation in small firms.