SME Innovation and Growth: Towards a Support Framework

Supporting small and medium-sized enterprises (SMEs) to grow and innovate has been an important priority in national economic strategies. These are often underpinned at regional level by the implementation of Innovation Support Programmes (ISP) and the content, delivery and targeting of these has received attention from both the academic and policy communities. SME growth, however, is not easy to achieve and, as a result, a long tradition of research has attempted to identify and define Critical Success Factors (CSF) and orientations demonstrated by successful small firms. Studies have shown that SME development needs to be understood in its embeddedness in various contexts and that qualitative factors, such as leadership, culture, human and owner-manager and entrepreneurial orientations (EO), can have a compelling impact on a firm’s dynamic capabilities and overall success. This thesis builds on the discourse regarding the identification of CSFs demonstrated by high-growth innovative SMEs. The study takes a sociological institutional approach to its research questions to broaden our understanding of the crucial role of the owner-manager, key strategic considerations, challenges and choices, and institutional frameworks that can embed entrepreneurial behaviours. Understanding the characteristics that are conducive to growth, combined with a deeper understanding of broader institutional contexts in which the SME operates, should assist in the development of a more robust CSF framework to enhance ISPs. The study follows a pragmatic research design, involving a survey of 200 SMEs, 50 face-toface interviews with SME owner-managers and a focus group. Thematic analysis was used to identify key themes, characteristics and strategies that have a bearing on growth and innovation performance and the impact of ISPs on firms. The findings show that leadership and strategic orientations can have a significant impact on SME growth. Such orientations can be the bedrock of the provision of goods or services that others find difficult to replicate, the positive management of and resilience to challenges and the ability to develop customer-focused business models. These orientations are summarised in frameworks of CSFs and Critical Leadership Characteristics. This knowledge not only assists in the challenge of identifying high growth potential but also provides a more complete picture of CSFs that can be used by stakeholders in the targeting and delivery of more effective, nuanced and calibrated policy support. The thesis concludes with recommendations for policymakers, owner-managers and academic partners to increase the impact of their Innovation Support strategies and activities to meet economic and societal goals.