Final Assignment (Term Paper) : Research Focus and Methodologies for
Understanding Innovation in Small-Medium Enterprises (SMEs)

Course : Qualitative Case Study Research
Faculty : Prof. Rajen Gupta, MDI
Submitted by : Davinder Singh, EFPM (2011)

Research Focus and Methodologies for Understanding Innovation in Small - Medium
Enterprises (SMEs)

Introduction
Innovation is a product, service, or process that is new or perceived as new by its developers and provides increased value to user and organization (Van de Ven, 1986). The ability of an organization to innovate is increasingly being considered as the most important factor for competitive advantage (Tidd et al., 2001). Importance has been laid on building innovative organizations and the management of the innovation process with the organizations. This is increasingly being considered important for small-medium enterprises (SMEs) and has been researched from multiple perspectives.
The aim of this paper is to discuss, the areas of innovation in SMEs which are focus of recent studies, and the various research methodologies utilized for these studies. The importance to study innovation in SMEs is discussed in the succeeding section. This is followed with discussion on research studies undertaken in this field in the recent past. The difference in the ontological perspective and the consequent use of different research methodologies has been discussed using construct of ‘knowledge’ as illustration.
Innovation in SMEs
The role of SMEs in a country’s economy cannot be overlooked. They form a sizeable part of industry. In UK over 90% of all businesses are SMEs, providing 55% of non-governmental employment and providing 51% of turnover (SBS, 2001). In India, similar to UK, SMEs play an important role in the economy. They have a share of 40% in industrial output and account for 45% of all