DETERMINANTS OF INNOVATION IN MICRO AND SMALL ENTERPRISES: A MANAGEMENT APPROACH

VASCONCELOS, RENATA BRAGA BERENGUER DE; OLIVEIRA, MARCOS ROBERTO GOIS DE

doi:10.1590/S0034-759020180402

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• Rev. adm. empres. 58 (4) • Jul-Aug 2018 • https://doi.org/10.1590/S0034-759020180402 copy

DETERMINANTS OF INNOVATION IN MICRO AND SMALL ENTERPRISES: A MANAGEMENT APPROACH

Authorship SCIMAGO INSTITUTIONS RANKINGS

ABSTRACT

The article sought to evaluate the impact of management factors on the innovation capability of micro and small enterprises (SMEs). A total of 315 SMEs were analyzed in Pernambuco in the period 2015-2016. The following internal factors were considered: leadership, people management, information and knowledge, customer relationship, business-society relationship, results, age, and size. The innovation capability was measured by the degree of sectoral innovation. The relationships were analyzed by means of multiple linear regression and data envelopment analysis. The results demonstrated that leadership, information and knowledge, customer relationships, and society positively influence innovation capability and its efficiency.

KEYWORDS:
Innovation capability; determinants of innovation; micro and small businesses; data envelopment analysis; multiple linear regression

Hypothesis	Description
H1	Leadership positively influences the innovation capability of MSEs.
H2	People management positively influences the innovation capability of MSEs.
H3	Information and knowledge obtained by MSEs positively influence their innovation capability.
H4	Customer relationship positively influences the innovation capability of MSEs.
H5	Business-society relationship positively influences the innovation capability of MSEs.
H6	Results obtained by MSEs positively influence their innovation capability.
H7	Age positively influences the innovation capability of MSEs.
H8	Size positively influences the innovation capability of MSEs.

Dependent variables	Nº components	Aspects considered by the components
Leadership	7	It analyzes how managers exercise leadership and invest in managerial development. It observes the formulation of the mission, communication, and information sharing with employees and the promotion of innovation.
People	5	It observes the definition of roles and responsibilities in the firm. It considers the selection and empowerment of people, the risks, and hazards associated with work, and the well-being practices carried out by the organization.
Information and knowledge	3	It analyzes the information necessary to carry out the company's activities and to make decisions. It observes the sharing of knowledge and the use of comparative information in performance analysis.
Customers	5	It verifies how the needs and expectations of potential and current customers are identified, how the products' promotion is conducted, and how customer relationship is maintained.
Society	3	It analyzes the management practices of the company in relation to society by complying with legal requirements, environmental and social aspects.
Results	6	It analyzes the results presented by the company, relating to customers, employees, main processes and financial performance.

Dimension	Definition
Offerings	Development of new products or services for the market.
Platform	Sharing of components, methods or technologies to make the production system more adaptable to the products or services offered.
Brand	Use of the brand to leverage new market opportunities.
Customers	Discovery of new segments or unmet needs.
Solutions	Custom and integrated combination of goods, services and information capable of solving customer problems.
Customer experience	Formulation of the customer experience and its interface with the organization.
Value capture	Capturing the created value by discovering untapped revenue streams or by interacting with customers and partners.
Processes	Change of the activities of operations internal to the company to obtain greater efficiency, better quality or faster cycle time.
Organization	Changes in the structure of the company, in the role of employees and partnerships.
Supply chain	Logistics aspects of the business.
Presence	New forms of commercialization and/or distribution to make the products available.
Networking	Improvements in communication resources to increase the value of the company.
Innovative environment	Sources of knowledge in innovation used by the company.

		Nº of companies	Frequency
Sector	Food industry	71	22.5%
	Furniture	53	16.8%
	Clothing	68	21.6%
	Gastronomy	66	21.0%
	Hotel and Tourism	57	18.1%
Age	1-5	127	40.3%
	6-15	111	35.2%
	16-25	56	17.8%
	25	21	6.7%
Size	1-10	182	58.0%
	11-20	71	22.6%
	21-40	44	14.0%
	40	17	5.4%
Region	Metropolitan Region of Recife	273	86.7%
Region	Other regions of the state	42	13.3%

Dimension	Food industry	Furniture	Clothing	Gastronomy	Hotel/ Tourism	All segments
Offerings	2.74 ^* * pk>0.05	3.40 ^* * pk>0.05	2.97	3.34 ^* * pk>0.05	2.08	2.91
Platform	4.41 ^* * pk>0.05	4.57 ^* * pk>0.05	4.54 ^* * pk>0.05	4.06 ^* * pk>0.05	4.16 ^* * pk>0.05	4.34
Brand	3.01 ^* * pk>0.05	2.45	3.69 ^* * pk>0.05	3.76 ^* * pk>0.05	3.64 ^* * pk>0.05	3.34
Customers	2.15 ^* * pk>0.05	3.04 ^* * pk>0.05	3.07 ^* * pk>0.05	2.49	2.95	2.71
Solutions	1.46	2.66	2.28	1.77	3.03 ^* * pk>0.05	2.19
Customer experience	2.13	2.11	3.24	2.64 ^* * pk>0.05	3.78 ^* * pk>0.05	2.77
Value capture	1.27	1.75	1.79	1.83	1.55	1.63
Processes	1.64	2.13	1.99	1.68	2.33	1.93
Organization	1.64	2.26	2.11	2.13	2.63	2.13
Supply chain	1.42	2.13	1.88	2.00	2.66	1.99
Presence	1.18	1.55	1.79	1.38	2.38	1.64
Networking	1.56	2.89 ^* * pk>0.05	2.24	1.36	3.86 ^* * pk>0.05	2.31
Innovative environment	1.72	2.16	1.75	1.94	2.52	1.99

	Food industry	Furniture	Clothing	Gastronomy	Hotel / Tourism
Degree of Sectorial Innovation (DSI_Mt)	2.39^* * significant difference for a p-value<0.05 according to the Kruskal-Wallis test	2.83^* * significant difference for a p-value<0.05 according to the Kruskal-Wallis test	2.90^* * significant difference for a p-value<0.05 according to the Kruskal-Wallis test	2.71*	3,20*

	Leadership	Customers	Society	Info. and know.	People	Results	lnAge	lnSize	DSI_it
Leadership	1
Customers	0.582	1
Society	0.498	0.266	1
Info. and know.	0.628	0.614	0.410	1
People	0.650	0.459	0.94	0.536	1
Results	0.438	0.518	0.187	0.419	0.383	1
Ln Age	0.036	-0.211	0.133	-0.098	0.067	-0.062	1
Ln Size	0.264	0.08	0.259	0.112	0.326	-0.009	0.252	1
GIS_it	0.485	0.382	0.394	0.496	0.371	0.208	0.07	0.213	1

Variable	Coefficient	p-value	Collinearity
Variable	Coefficient	p-value	Tolerance	FIV
Constant	0.700	0.000 ^* * p-value<0.05
Leadership	0.084	0.009 ^* * p-value<0.05	0.398	2.514
Customers	0.051	0.098 ^ p-value<0.10	0.468	2.136
Society	0.071	0.006 ^* * p-value<0.05	0.658	1.519
Information and knowledge	0.146	0.000 ^* * p-value<0.05	0.459	2.177
People	-0.024	0.467	0.480	2.083
Results	-0.017	0.196	0.580	1.723
LnAge	0.015	0.251	0.744	1.344
LnSize	0.015	0.133	0.797	1.254
Sector	-0.013	0.539	0.702	1.424
R²	0.336

Outputs	Contribution
Offerings	11%
Platform	16%
Brand	8%
Customer	5%
Solutions	9%
Customer experience	8%
Value capture	3%
Processes	10%
Organization	7%
Supply chain	5%
Presence	3%
Networking	4%
Innovative environment	11%

Inputs	Contribution
Leadership	27%
Customers	20%
Society	31%
Information and knowledge	22%

Variable	Coefficient	p-value	Collinearity
Variable	Coefficient	p-value	Tolerance	VIF
Constant	0.800	0.000 ^* * p-value<0.05
Leadership	0.090	0.013 ^* * p-value<0.05	0.460	2.172
Customers	0.084	0.019 ^* * p-value<0.05	0.497	2.012
Society	0.095	0.001 ^* * p-value<0.05	0.758	1.319
Information and knowledge	0.178	0.000 ^* * p-value<0.05	0.468	2.136
Sector	-0.028	0.001 ^* * p-value<0.05	0.757	1.320
R²	0.497

Variable	Coefficient	p-value	Collinearity
Variable	Coefficient	p-value	Tolerance	VIF
Constant	0.717	0.000 ^* * p-value<0.05
Leadership	0.052	0.123	0.541	1.847
Customers	0.012	0.691	0.646	1.547
Society	0.071	0.021 ^* * p-value<0.05	0.741	1.350
Information and knowledge	0.203	0.000 ^* * p-value<0.05	0.557	1.796
Sector	-0.018	0.010 ^* * p-value<0.05	0.978	1.023
R²	0.409

Hypothesis	Description	Results
Hypothesis	Description	Efficient	Not efficient
H1	Leadership positively influences the innovation capability of MSEs.	+	N / S
H2	People management positively influences the innovation capability of MSEs.	N / S	N / S
H3	Information and knowledge obtained by MSEs positively influence their innovation capability.	+	+
H4	Customer relationship positively influences the innovation capability of MSEs.	+	N / S
H5	Business-society relationship positively influences the innovation capability of MSEs.	+	+
H6	Results obtained by MSEs positively influence their innovation capability.	N / S	N / S
H7	Age positively influences the innovation capability of MSEs.	N / S	N / S
H8	Size positively influences the innovation capability of MSEs.	N / S	N / S

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