The Effect of Business Improvement Methods on Innovation in Small and Medium-Sized Enterprises in Peripheral Regions

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Abstract

Harris R., McAdam R. and Reid R. The effect of business improvement methods on innovation in small and medium-sized enterprises in peripheral regions, Regional Studies. This paper tests whether commonly used business improvement methods (BIM) foster or inhibit innovation in small and medium-sized enterprises (SMEs) in peripheral regions. The findings show that adopting BIM diverts firms away from successful innovation (i.e., in terms of new products/services and new processes in the past three years), and instead is associated with undertaking innovation-related activities while remaining non-innovators. Indeed, reinforcing BIM (through greater ‘depth’ of use) may lead to further exclusion from successful innovation.
LanguageEnglish
Pages1-15
JournalRegional Studies
Volume0
DOIs
Publication statusAccepted/In press - 21 Jul 2015

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Innovation
Small and medium-sized enterprises
Business improvement
Peripheral regions
Exclusion
New products
Regional studies

Keywords

  • SME
  • Business Improvement
  • peripheral regions

Cite this

@article{a5ba044f45e240efafa2d5a7ade549c9,
title = "The Effect of Business Improvement Methods on Innovation in Small and Medium-Sized Enterprises in Peripheral Regions",
abstract = "Harris R., McAdam R. and Reid R. The effect of business improvement methods on innovation in small and medium-sized enterprises in peripheral regions, Regional Studies. This paper tests whether commonly used business improvement methods (BIM) foster or inhibit innovation in small and medium-sized enterprises (SMEs) in peripheral regions. The findings show that adopting BIM diverts firms away from successful innovation (i.e., in terms of new products/services and new processes in the past three years), and instead is associated with undertaking innovation-related activities while remaining non-innovators. Indeed, reinforcing BIM (through greater ‘depth’ of use) may lead to further exclusion from successful innovation.",
keywords = "SME, Business Improvement, peripheral regions",
author = "Rodney Mcadam",
note = "Reference text: Abreu M., Grinevich V., Kitson M. and Savona M. (2011) The Changing Face of Innovation Policy: Implications for the Northern Ireland Economy. ETI, Belfast (available at: http://www.detini.gov.uk/deti-eco-dev-index.htm). Acs Z. J. and Audretsch DB. (1988) Innovation in large and small firms: an empirical analysis, American Economic Review 78, 678–690.[Web of Science {\circledR}] Ahire S. and Golhar D. (1996) Quality management in large vs small firms: an empirical investigation, Journal of Small Business Management 34, 1–13.[Web of Science {\circledR}] Arbuthnott A. and von Friedrichs Y. (2013) Entrepreneurial renewal in a peripheral region: the case of a winter automotive-testing cluster in Sweden, Entrepreneurship and Regional Development 25, 371–403. doi:10.1080/08985626.2012.748095[Taylor & Francis Online], [Web of Science {\circledR}] ASQ (2012) Continuous Improvement (available at: http://asq.org/learn-about-quality/continuous-improvement/overview/overview.html). Barclay I. and Porter K. (2005) Facilitating innovation across SME networks, International Journal of Entrepreneurship and Innovation Management 5, 20–35. doi:10.1504/IJEIM.2005.006335[CrossRef] Bessant, J. and Tidd, J. (2011) Entrepreneurship and Innovation: Integrating Technological, Market and Organisational Change. Wiley, Chichester. Bhaskaran S. (2006) Incremental innovation and business performance: small and medium-size food enterprises in a concentrated industry environment, Journal of Small Business Management 44, 64–80. doi:10.1111/j.1540-627X.2006.00154.x[CrossRef], [Web of Science {\circledR}] Cassar G. (2010) Are individuals entering self-employment overly optimistic? An empirical test of plans and projections on nascent entrepreneur expectations, Strategic Management Journal 31, 822–840.[Web of Science {\circledR}] Clark D. (2010) Innovation management in SMEs: active innovators in New Zealand, Journal of Small Business and Entrepreneurship 23, 601–619. doi:10.1080/08276331.2010.10593504[Taylor & Francis Online] Cohen W. M. and Levinthal D. A. (1989) Innovation and learning: the two faces of R&D, Economic Journal 99, 569–596. doi:10.2307/2233763[CrossRef], [Web of Science {\circledR}] Cohen W. M. and Levinthal D. A. (1990) Absorptive capacity: a new perspective on learning and innovation, Administrative Science Quarterly 35, 128–152. doi:10.2307/2393553[CrossRef], [Web of Science {\circledR}], [CSA] Cooke P. (1996) The new wave of regional innovation networks: analysis, characteristics and strategy, Small Business Economics 8, 159–171. doi:10.1007/BF00394424[CrossRef], [Web of Science {\circledR}] Cooke P. and Schwartz D. (2008) Regional knowledge economies: an EU–UK and Israel perspective, Tijdschrift voor Economische en Sociale Geografie 99, 178–192. doi:10.1111/j.1467-9663.2008.00451.x[CrossRef], [Web of Science {\circledR}] Cooke P., Uranga M. G. and Etxebarria G. (1997) Regional innovation systems: institutional and organisational dimensions, Research Policy 26, 475–491. doi:10.1016/S0048-7333(97)00025-5[CrossRef], [Web of Science {\circledR}] Darroch J. and McNaughton R. (2002) Examining the link between knowledge management practices and types of innovation, Journal of Intellectual Capital 3, 210–222. doi:10.1108/14691930210435570[CrossRef] Department for Innovation, Universities and Skills (DIUS) (2008) Innovation Nation. Command Paper No. 7345. DIUS/TSO, London (available at: http://www.dius.gov.uk/publications/scienceinnovation.pdf). Department of Trade and Industry (DTI) (2003) Competing in the Global Economy. DTI/TSO, London (available at: http://www.bis.gov.uk/files/file9666.pdf). EEF (2008) Manufacturing IT – Boosting Productivity by Managing Performance (available at: http://www.eef.org.uk/publications/reports/Manufacturing-IT-boosting-productivity-by-managing-performance.htm). Enterprise Ireland (2012) Productivity – Building Company Competitiveness through Best Practice (available at: http://www.enterprise-ireland.com/en/Productivity/). Escribano A., Fosfuri A. and Trib{\'o} J. A. 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T1 - The Effect of Business Improvement Methods on Innovation in Small and Medium-Sized Enterprises in Peripheral Regions

AU - Mcadam, Rodney

N1 - Reference text: Abreu M., Grinevich V., Kitson M. and Savona M. (2011) The Changing Face of Innovation Policy: Implications for the Northern Ireland Economy. ETI, Belfast (available at: http://www.detini.gov.uk/deti-eco-dev-index.htm). Acs Z. J. and Audretsch DB. (1988) Innovation in large and small firms: an empirical analysis, American Economic Review 78, 678–690.[Web of Science ®] Ahire S. and Golhar D. (1996) Quality management in large vs small firms: an empirical investigation, Journal of Small Business Management 34, 1–13.[Web of Science ®] Arbuthnott A. and von Friedrichs Y. (2013) Entrepreneurial renewal in a peripheral region: the case of a winter automotive-testing cluster in Sweden, Entrepreneurship and Regional Development 25, 371–403. doi:10.1080/08985626.2012.748095[Taylor & Francis Online], [Web of Science ®] ASQ (2012) Continuous Improvement (available at: http://asq.org/learn-about-quality/continuous-improvement/overview/overview.html). Barclay I. and Porter K. (2005) Facilitating innovation across SME networks, International Journal of Entrepreneurship and Innovation Management 5, 20–35. doi:10.1504/IJEIM.2005.006335[CrossRef] Bessant, J. and Tidd, J. (2011) Entrepreneurship and Innovation: Integrating Technological, Market and Organisational Change. Wiley, Chichester. Bhaskaran S. (2006) Incremental innovation and business performance: small and medium-size food enterprises in a concentrated industry environment, Journal of Small Business Management 44, 64–80. doi:10.1111/j.1540-627X.2006.00154.x[CrossRef], [Web of Science ®] Cassar G. (2010) Are individuals entering self-employment overly optimistic? An empirical test of plans and projections on nascent entrepreneur expectations, Strategic Management Journal 31, 822–840.[Web of Science ®] Clark D. (2010) Innovation management in SMEs: active innovators in New Zealand, Journal of Small Business and Entrepreneurship 23, 601–619. doi:10.1080/08276331.2010.10593504[Taylor & Francis Online] Cohen W. M. and Levinthal D. A. (1989) Innovation and learning: the two faces of R&D, Economic Journal 99, 569–596. doi:10.2307/2233763[CrossRef], [Web of Science ®] Cohen W. M. and Levinthal D. A. (1990) Absorptive capacity: a new perspective on learning and innovation, Administrative Science Quarterly 35, 128–152. doi:10.2307/2393553[CrossRef], [Web of Science ®], [CSA] Cooke P. (1996) The new wave of regional innovation networks: analysis, characteristics and strategy, Small Business Economics 8, 159–171. doi:10.1007/BF00394424[CrossRef], [Web of Science ®] Cooke P. and Schwartz D. (2008) Regional knowledge economies: an EU–UK and Israel perspective, Tijdschrift voor Economische en Sociale Geografie 99, 178–192. doi:10.1111/j.1467-9663.2008.00451.x[CrossRef], [Web of Science ®] Cooke P., Uranga M. G. and Etxebarria G. (1997) Regional innovation systems: institutional and organisational dimensions, Research Policy 26, 475–491. doi:10.1016/S0048-7333(97)00025-5[CrossRef], [Web of Science ®] Darroch J. and McNaughton R. (2002) Examining the link between knowledge management practices and types of innovation, Journal of Intellectual Capital 3, 210–222. doi:10.1108/14691930210435570[CrossRef] Department for Innovation, Universities and Skills (DIUS) (2008) Innovation Nation. Command Paper No. 7345. DIUS/TSO, London (available at: http://www.dius.gov.uk/publications/scienceinnovation.pdf). Department of Trade and Industry (DTI) (2003) Competing in the Global Economy. DTI/TSO, London (available at: http://www.bis.gov.uk/files/file9666.pdf). EEF (2008) Manufacturing IT – Boosting Productivity by Managing Performance (available at: http://www.eef.org.uk/publications/reports/Manufacturing-IT-boosting-productivity-by-managing-performance.htm). Enterprise Ireland (2012) Productivity – Building Company Competitiveness through Best Practice (available at: http://www.enterprise-ireland.com/en/Productivity/). Escribano A., Fosfuri A. and Tribó J. A. (2009) Managing external knowledge flows: the moderating role of absorptive capacity, Research Policy 38, 96–105. doi:10.1016/j.respol.2008.10.022[CrossRef], [Web of Science ®] European Commission (2006a) Putting Knowledge into Practice: A Broad-Based Innovation Strategy for the EU. COM(2006) 502 final. European Commission, Brussels (available at: http://eur-lex.europa.eu/LexUriServ/site/en/com/2006/com2006_0502en01.pdf). European Commission (2006b) Competitiveness and Innovation Framework Programme. European Commission, Brussels (available at: http://ec.europa.eu/cip/index_en.htm). European Regional Development Fund Guidelines (2010) Specific Territorial Characteristics (available at: http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/08/93&format=HTML&aged=0&language=EN&guiLanguage=en). Fabrizio K. R. (2009) Absorptive capacity and the search for innovation, Research Policy 38, 255–267. doi:10.1016/j.respol.2008.10.023[CrossRef], [Web of Science ®] Feng J., Prajogo D., Tan K. and Sohal A. (2006) The impact of TQM practices on performance; a comparative study between Australia and Singapore organisations, European Journal of Innovation Management 9, 269–278. doi:10.1108/14601060610678149[CrossRef] Flynn B. B. (1994) The relationship between quality management practices, infrastructure and fast product innovation, Benchmarking for Quality Management and Technology 1, 48–64. doi:10.1108/14635779410056886[CrossRef] Foss N. (1993) Theories of the firm: contractual and competence perspectives, Journal of Evolutionary Economics 3, 127–144. doi:10.1007/BF01213830[CrossRef] Fraser S., Greene F. J. and Mole K. F. (2007) Sources of bias in the recall of self-generated data: the role of anchoring, British Journal of Management 18, 192–208. doi:10.1111/j.1467-8551.2006.00510.x[CrossRef], [Web of Science ®] Freel M. (2000) Barriers to product innovation in small manufacturing firms, International Small Business Journal 18, 60–80. doi:10.1177/0266242600182003[CrossRef] Freel M. and Rodson P. (2004) Small firm innovation, growth and performance: evidence from Scotland and Northern England, International Small Business Journal 22, 561–575. doi:10.1177/0266242604047410[CrossRef], [Web of Science ®] Freeman C. (1982) The Economics of Industrial Innovation, 2nd Edn. Pinter, London. Freeman C. and Soete L. (1997) The Economics of Industrial Innovation, 3rd Edn. MIT Press, Cambridge, MA. Ghobadian A. and Gallear D. 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PY - 2015/7/21

Y1 - 2015/7/21

N2 - Harris R., McAdam R. and Reid R. The effect of business improvement methods on innovation in small and medium-sized enterprises in peripheral regions, Regional Studies. This paper tests whether commonly used business improvement methods (BIM) foster or inhibit innovation in small and medium-sized enterprises (SMEs) in peripheral regions. The findings show that adopting BIM diverts firms away from successful innovation (i.e., in terms of new products/services and new processes in the past three years), and instead is associated with undertaking innovation-related activities while remaining non-innovators. Indeed, reinforcing BIM (through greater ‘depth’ of use) may lead to further exclusion from successful innovation.

AB - Harris R., McAdam R. and Reid R. The effect of business improvement methods on innovation in small and medium-sized enterprises in peripheral regions, Regional Studies. This paper tests whether commonly used business improvement methods (BIM) foster or inhibit innovation in small and medium-sized enterprises (SMEs) in peripheral regions. The findings show that adopting BIM diverts firms away from successful innovation (i.e., in terms of new products/services and new processes in the past three years), and instead is associated with undertaking innovation-related activities while remaining non-innovators. Indeed, reinforcing BIM (through greater ‘depth’ of use) may lead to further exclusion from successful innovation.

KW - SME

KW - Business Improvement

KW - peripheral regions

U2 - 10.1080/00343404.2015.1083971

DO - 10.1080/00343404.2015.1083971

M3 - Article

VL - 0

SP - 1

EP - 15

JO - Regional Studies

T2 - Regional Studies

JF - Regional Studies

SN - 0034-3404

ER -