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Investigating a neglected part of Schumpeter’s creative army: what drives new-to-the-market innovation in micro-enterprises?

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  • Stephen Roper

    (University of Warwick)

  • Nola Hewitt-Dundas

    (Queen’s University Belfast)

Abstract

Schumpeterian arguments related to creative destruction place small, entrepreneurial firms at the centre of the innovation process. The exclusion of micro-enterprises (with less than 10 employees) from most innovation surveys means, however, that we know relatively little about innovation among this group of firms. Here, using new survey data on a thousand micro-enterprises, we explore the determinants of new-to-the-market innovation, the basis for the Schumpeterian creative destruction (CD) process. Our results provide strong support for the interactive nature of micro-enterprise innovation and suggest the potential value of a model of interactive creative destruction (ICD). Contrary to some other recent evidence, market-based and supplier-based collaboration both prove important for new-to-the-market innovation. Our results suggest the importance of micro-enterprises as sources of new-to-the-market innovation and the potential value of including such firms in future innovation studies.

Suggested Citation

  • Stephen Roper & Nola Hewitt-Dundas, 2017. "Investigating a neglected part of Schumpeter’s creative army: what drives new-to-the-market innovation in micro-enterprises?," Small Business Economics, Springer, vol. 49(3), pages 559-577, October.
    • Handle: RePEc:kap:sbusec:v:49:y:2017:i:3:d:10.1007_s11187-017-9844-z
    DOI: 10.1007/s11187-017-9844-z
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    2. D’Angelo, Alfredo & Ganotakis, Panagiotis & Love, James H., 2020. "Learning by exporting under fast, short-term changes: The moderating role of absorptive capacity and foreign collaborative agreements," International Business Review, Elsevier, vol. 29(3).
    3. Arza, Valeria & López, Emanuel, 2021. "Obstacles affecting innovation in small and medium enterprises: Quantitative analysis of the Argentinean manufacturing sector," Research Policy, Elsevier, vol. 50(9).
    4. Becker, Bettina & Roper, Stephen & Vanino, Enrico, 2023. "Assessing innovation spillovers from publicly funded R&D and innovation support: Evidence from the UK," Technovation, Elsevier, vol. 128(C).
    5. Garrido-Prada, Pablo & Lenihan, Helena & Doran, Justin & Rammer, Christian & Perez-Alaniz, Mauricio, 2021. "Driving the circular economy through public environmental and energy R&D: Evidence from SMEs in the European Union," Ecological Economics, Elsevier, vol. 182(C).
    6. Castellani, Davide & Piva, Mariacristina & Schubert, Torben & Vivarelli, Marco, 2019. "R&D and productivity in the US and the EU: Sectoral specificities and differences in the crisis," Technological Forecasting and Social Change, Elsevier, vol. 138(C), pages 279-291.

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    More about this item

    Keywords

    Innovation; Micro-enterprise; Creative destruction;
    All these keywords.

    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • Q34 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Natural Resources and Domestic and International Conflicts
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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