| Abstract: |
This paper seeks to construct a new theory on SME innovation by reviewing and
comprehending findings and knowledge obtained to date from a unified
perspective. Conventional research on innovation in general has focused
thematically on individual factors such as absorptive capability, R&D, and
open innovation. While this approach has its advantages, it is critical to
research innovation as a single process from a broad perspective and
framework. This analyzes how SMEs acquire new information and ideas that are
the source of innovation, organize and conduct R&D to integrate these ideas
with management resources within the frim, and finally, how they produce the
concrete output of these steps that lead to the development of new products.
Our research especially seeks to answer what elements are needed in this
process, and how they should be combined. In addition, this paper focuses on
internal innovation capability which includes factors such as technologies
that the company own, human resources (human factor), managerial
organizational form (organization), leadership, and so on. These factors also
consist of detailed sub-factors. The examples of the third layer contain as
the following factors, for example. The technological factor includes the
following factors: (a) ratio of R&D expenditure to sales; (b) the number of
intellectual property right owned; and (c) technical and management systems
such as R&D. (ii) Managerial organization indicates whether the managerial
organization is designed and functioning to encourage exchange and share
information among employees or communications inside the firm for innovation.
This consists of the following sub-factors: (d) practicing QC circle; (e)
cross-functional team; (f) information sharing system using ICT; and (g) the
traditional background to stimulate discussions and communications among
sections of the firms. Finally, the human resources is an important factor for
engaging in innovation activities as well as for design and managing R&D,
which consist of the following sub-factors: (h) ability of top management such
as degrees or experiences; (i) leadership of top management; (j) degrees and
experiences of employees; and (k) the Human Resource Development scheme (HRD)
such as OJT (On-the-job training) or OFFJT (Off-the-job training). This paper
particularly focuses on factors such as technology, R&D, and ICT use. |