Abstract:
This research study uses a resource-based perspective to addresses innovation in
indigenous micro, small and medium enterprises (MSME) in a globalized emerging
economy. Unlike large multinationals operating in these economies, indigenous
MSME are tied to their local/regional institutional contexts. While on one hand they
benefit from the spillovers of globalization, on the other, they have to compete for
resources with larger firms. Using a broad definition of innovation, this research
highlights the nature of innovation and the barriers affecting innovative outcomes in
these firms. Compared to earlier studies, this study explicitly makes a distinction
between micro-firms and larger SME as well as core and non-core innovative
outcomes. New data for this research was obtained by implementing a primary
survey along the lines of the Oslo Framework in Bangalore, one of India’s most
globalized regions resulting in a sample of 108 MSME. This research finds that
compared to larger SME, micro-firms have less innovative dynamism with both core
and non-core innovations. This research also finds that firm size plays an important
moderating effect between barriers and innovative outcomes. When barriers related
to core technical innovations are present, larger SME are more likely to introduce
other types of innovations whereas micro-firms are less likely to introduce any kind
of innovation.
