Developing a model of innovation implementation for UK SMEs: A path analysis and explanatory case analysis

Abstract

Continuous large-scale changes in technology and the globalization of markets have resulted in the need for many SMEs to use innovation as a means of seeking competitive advantage where innovation includes both technological and organizational perspectives (Tapscott, 2009). However, there is a paucity of systematic and empirical research relating to the implementation of innovation management in the context of SMEs. The aim of this article is to redress this imbalance via an empirical study created to develop and test a model of innovation implementation in SMEs. This study uses Structural Equation Modelling (SEM) to test the plausibility of an innovation model, developed from earlier studies, as the basis of a questionnaire survey of 395 SMEs in the UK. The resultant model and construct relationship results are further probed using an explanatory multiple case analysis to explore ‘how’ and ‘why’ type questions within the model and construct relationships. The findings show that the effects of leadership, people and culture on innovation implementation are mediated by business improvement activities relating to Total Quality Management/Continuous Improvement (TQM/ CI) and product and process developments. It is concluded that SMEs have an opportunity to leverage existing quality and process improvement activities to move beyond continuous improvement outcomes towards effective innovation implementation. The article concludes by suggesting areas suitable for further research.