SME Network Characteristics vs. Product Innovativeness: How to Achieve High Innovation Performance

Abstract

Small‐ and medium‐sized enterprises (SMEs) must on the one hand innovate for company survival with the appropriate degree of product innovativeness, and on the other they need to collaborate and focus on core competences for efficiency matters. This research examines the relation of network characteristics and product innovativeness on innovation performance in SMEs. We tested hypotheses on the relationship between these three variables via data gathered from 60 SMEs, active in the medical devices sector. In this context we aim to offer consensus on the theoretical and empirical question of whether or not network characteristics and product innovativeness have a direct effect on innovation performance of SMEs. Results show no significant direct effect of product innovativeness on innovation performance. A positive interaction effect of multiple network characteristics on innovation performance was found, which confirms the significant importance of network configuration on innovation performance for SMEs. It indicates that, for SMEs in a highly regulated sector like the medical devices sector, the interaction of network characteristics is of crucial importance for high innovation performance. It is the combination of network characteristics that counts.