Capabilities for innovation in small firms - A study of 131 high-tech firms and their relation to performance

Journal article, 2012

Organisational capabilities have been widely discussed - most often at a conceptual level and from a large firm perspective. This paper examines the operationalisation and measurement of the capabilities for innovation in small firms and also how capabilities may be related to the firm's innovation performance. Based on a quantitative analysis of 131 small high-tech firms, this paper describes and analyses the dimensions critical for innovation with a special focus on very small high-tech firms. We propose a construct for investigation including five dimensions relating to small firm capabilities and their relation to innovation performance. We found 20 relationships between the capabilities dimensions and innovation performance, of which the performance dimension of 'patent' showed to be particularly correlated to capabilities. Our statistical analysis shows that two latent constructs have a positive effect on innovation performance: cooperation with universities and business planning and advice.