Innovation in Emerging Market Micro, Small and Medium Enterprises: Barriers and Access to Resources




Ramnath, Gayatri

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This research study uses a resource-based perspective to addresses innovation in indigenous micro, small and medium enterprises (MSME) in a globalized emerging economy. Unlike large multinationals operating in these economies, indigenous MSME are tied to their local/regional institutional contexts. While on one hand they benefit from the spillovers of globalization, on the other, they have to compete for resources with larger firms. Using a broad definition of innovation, this research highlights the nature of innovation and the barriers affecting innovative outcomes in these firms. Compared to earlier studies, this study explicitly makes a distinction between micro-firms and larger SME as well as core and non-core innovative outcomes. New data for this research was obtained by implementing a primary survey along the lines of the Oslo Framework in Bangalore, one of India’s most globalized regions resulting in a sample of 108 MSME. This research finds that compared to larger SME, micro-firms have less innovative dynamism with both core and non-core innovations. This research also finds that firm size plays an important moderating effect between barriers and innovative outcomes. When barriers related to core technical innovations are present, larger SME are more likely to introduce other types of innovations whereas micro-firms are less likely to introduce any kind of innovation.



Innovation, Resources, Small business, Barriers, Emerging economy, Institutions