Processes of innovation among manufacturing SMEs: the experience of Bedfordshire

This paper contributes to the study of innovative SMEs in two ways. First, the entirety of recent work focuses upon success cases of local innovation systems at the expense of less successful areas, which are thus in greater need of policy intervention. This paper aspires to address this gap in the literature by focusing on the experience of an area (Bedfordshire) characterized by low levels of innovative activity. Second, the search for the factors that accommodate or hinder innovation concentrated heavily at the macro-level. Consequently, any policy recommendations failed to distinguish between SMEs according to the extent and nature of their previous involvement in innovation. In response the authors develop a typology of SMEs based upon the extent and timing of innovation; the underlined aim is to undertake a comparative analysis of the causes, processes and obstacles to innovative activity. It is argued that: (1) there appears to be some relationship between the size of an enterprise and the extent of its involvement in innovation within the SME sector; (2) there are fundamental differences in the characteristics, processes and obstacles to innovation between the four elements of the typology; and (3) at the micro-level innovative activity does not appear to be positively related to job creation. Thus, increasing the innovative propensity of SMEs will not necessarily reduce unemployment rates.