Innovation in Small and Medium Sized Firms in the Electronics Industry

Abstract

This research project addresses the subject of the contribution of small and medium sized electronics firms to innovative activity. The definition adopted for firms falling within the remit of study was that they should employ no more than 2UU people and be wholly UK-owned. An analysis was attempted of the research undertaken on the smaller firm sector as a whole and a comparison was drawn between present government policy towards the sector and that forwarded by small firis commentators. Attention then focussed on the electronics industry. Interviews were conducted at 51 smaller electronics firms with a view to determining how those involved in the industry saw the role of such firms on both a general level and, more specifically, their contribution to innovative activity. It was found that although product innovation was apparent, by far the largest share of innovative activity was devoted to the process innovation field. Many of these process innovations are kept secret from competitors to enable the smaller firm to survive in a competitive environment. One of the most interesting facts to emerge was that innovation was used, in some instances, to enable the firm to remain small. The research concludes with a brief summary of the implications of the findings on both a yeneral and a more specific level.