PRODUCT INNOVATION IN SMALL COMPANIES: MANAGING RESOURCE SCARCITY THROUGH FINANCIAL BOOTSTRAPPING

Lars Löfqvist ()
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Lars Löfqvist: Faculty of Engineering and Sustainable Development, University of Gävle, SE-801 76, Gävle, Sweden

International Journal of Innovation Management (ijim), 2017, vol. 21, issue 02, 1-27

Abstract: Researchers have proposed that scarce resources are the main factor hindering product innovation in small companies. However, despite scarce resources, small companies do innovate, so the research question is: How do small companies manage resource scarcity in product innovation? To answer the research question a multiple case study of three small established companies and their product innovation was used, including interviews and observations over a period of five months. The small companies were found to use many different bootstrapping methods in combination within their product innovation. The methods can be classified into three different functional categories: bootstrapping methods for increasing resources, for using existing resources more efficiently, and those for securing a fast payback on resources put into product innovation. Due to their resource scarcity, the studied companies also favoured an innovation strategy only involving new products done with known technology and targeting existing markets. This strategy seems to avoid unsuccessful innovation but at the same time exclude technologically radical innovation.

Keywords: Product innovation; resources; resource scarcity; small company; financial bootstrapping; innovation management; small enterprise; small business; small firms; SME (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (2)

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DOI: 10.1142/S1363919617500207

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