Connecting the Nodes : An interactive perspective on innovative microenterprises in a mature industry

Abstract: The emergent nature of the innovation process has always rendered it an elusive subject of study. Nonetheless, academics remained undeterred in their attempts to articulate the innovation process in academics terms as attested by the growing amount of research on the topic. Existing theories for explaining innovation (or the lack of innovation) center on empirical samples from large firms in the high-tech sectors such as electronics, software and information technology. This partly explains why popular concepts of innovation processes are associated with firms having characteristics such as strong science and technology components or the ability to conduct research and development (R&D) activities which should lead to commercialization. What these concepts do not explain well is how small and medium sized enterprises (SMEs), in particular microenterprises, which are increasingly credited with contributing to innovative output, are acquiring and converting resources that they do not possess. Microenterprises (also known as small businesses, start-ups, family owned-businesses) possess similar characteristics to their SME counterparts when innovating through interacting in networks to access external resources as a way to make up for their lack of resources. However, the challenges faced by microenterprises can differ in scope from those of the general population of SMEs, in particular by having an emphasis on the importance of external actor bonds, resources ties and activity links during their innovation process. This thesis examined the interaction aspect of innovating microenterprises that are seen to be renewing the mature industry landscape. Set in the context of the food industry which have been viewed as traditional and having low levels of innovation, the innovation process of these Swedish microenterprises are examined through how they address the barriers to innovation each in their own way, utilizing and developing capacities through interaction in the network. Findings suggest that recommendations for microenterprises to build up the networks to gain access to external resources should be accompanied by an awareness of the types and quality of external resources and an on-going evaluation of the capacities that microenterprises have and continue to develop during the innovation process. This involves considering a strategic combination of actor bonds, resources ties and activities links that will connect the synergy between the capacities of both past and present nodes in the network to help overcome barriers in the innovation process for microenterprises.