Innovation capability development: case studies of small enterprises in the LMT manufacturing sector

Competitiveness in lower tech, small-to-medium sized enterprises (LMT-SMEs) depends as much on innovation as it does in high tech, larger counterparts. For many decades, innovation studies have focused on the latter sector that is differentiated from the former in one key respect–business investment in research and development (BERD). LMT-SMEs have low reported BERD and according to the OECD spend less than 3% of turnover on R&D. This figure masks hidden investments in non-traditional innovation that often goes unreported by managers. Adopting a case study approach, this research seeks to address two questions: ‘what innovation is occurring within LMT-SME’ and ‘what are the capabilities developed that support innovation activity’, allowing such firms to dynamically adapt to external environment turbulence. In exploring these issues, this study goes some way towards bridging the gap in the understanding of innovation in this often ‘forgotten sector’ [Hirsch-Kreinsen, H., & Jacobson, D. (Eds.). (2008). Innovation in low-tech firms and industries. Cheltenham: Edward Elgar].