Analysis of the innovation process within Italian SMEs

The industrial structure of many European countries is dominated by Small and Medium Enterprises (SMEs). Although SMEs consider the new product development process fundamental for the success in the global market, the level of formalisation of the innovation process is very low (Slywotzky et al., 1997). Moreover, if we consider the SMEs operating in the mature sectors, such as automotive and machines tools, the situation is worrying.The aim of this paper is to analyse in-deep, within a sample of SMEs located in a highly industrialised Italian region (Piedmont), the strategy used both for new product development, and for incremental innovation. The latter may often occur, not so much as structured research and development activities but, in order, for: - the involvement of the entrepreneur or managers; -the improvements informally suggested by engineers or technician engaged in the production process; - the proposals and the initiatives coming from users. The methodology in this paper is a longitudinal study which provides a close-up view of the adoption of these non-structured innovation patterns (Leonard-Barton, 1990; Langley, 1996).Although the SMEs located in this area are specialised rather than diversified in their technological competencies and product range, they lack of information about the financial facilities to the innovation process and marketing capabilities. These generate two effects: 1) the SMEs cannot tackle the R&D expenditures for new product; 2) they cannot completely take advantage from their innovation process.This research would like offer some useful considerations to the European policy maker and managers in managing new product development and innovation within SMEs.