Different types of innovator and their business performance

The ways in which SMEs generate innovations are only rarely the subject of public debate. The new survey by KfW Research and the ifh Göttingen demonstrates that small and medium-sized SMEs can be divided into three types of innovators.

One innovator type mainly uses industry-specific practical knowledge. A second innovator type primarily relies on the sales market as a source for information, a wide range of in-company interactions and a well-developed error management culture. The third innovator type conducts its own R&D and uses scientific findings. Other sources include information from the business environment, a well-developed error management culture and the use of management practices aimed at stimulating innovation activity.

Interactive learning or R&D: How do small and medium-sized enterprises generate innovations?(PDF, 372 KB, non-accessible)

Three types of innovators can be identified among the group of small and medium-sized enterprises (SMEs). This study examines whether there are any differences in business performance between the three groups.

The key finding of the analysis is that R&D-based innovators more often achieve higher growth rates. However, if we disregard enterprises with extremely high growth rates, there is hardly a difference in business growth between the groups. Small and medium-sized enterprises can be successful innovators even without own R&D.

Business performance of different types of small and medium-sized innovators(PDF, 326 KB, non-accessible)