Innovation in Australian Manufacturing SMEs : exploring the interaction between external and internal innovation factors

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This thesis examines the relationship between internal and external drivers of innovation in Australian manufacturing small and medium enterprises (SMEs). A mixed methods approach was employed to study this relationship, combining survey data and case studies to investigate the effect of technological change on innovative activities, an effect potentially mediated by SMEs’ particular characteristics. Results indicate that the absorptive capacity model of innovation is applicable to Australian manufacturing SMEs but there is also evidence that non-knowledge management characteristics of SMEs affect the impact that internal factors and technological changes can have on innovation. When employees have the freedom to trial new approaches to their work in a family-like culture, risk-taking behaviour is nurtured, leading to innovation. SMEs that exploit opportunities across different sectors and/or co-create with their customers are also more innovative. There may however be a limit to a firm’s ability to consume new technology with a responsive approach in meeting customer needs. The findings are of value especially to policy makers, academics, management practitioners, as it brings forward the antecedents of innovation in the Australian manufacturing context.
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