Understanding and managing firm innovativeness in Japanese SMEs

This paper reports on research which sought to provide a more comprehensive understanding of the underlying components of firm innovativeness. Our theoretical and practical understanding of the complex mix of issues that influence a firm’s ability to be more innovative remains fragmented at best. To develop a more thorough understanding of the phenomenon over 2000 firm owners and managers were surveyed in Japan and the results were factor analysed with twelve components emerging which associated a distinct and complex set of variables with firm innovativeness. Results indicate that it is necessary to view firm innovativeness from a multi-dimensional perspective in order to capture more thoroughly the essence of this complex and fluid phenomenon. Product, process and systems innovativeness are largely reliant upon the nature of the relationships among firm members particularly at the SME level. In recent times, firm innovativeness has held centre stage in organisational development research and given reduced cycle times, increased competition, greater consumer and market sophistication and the ever-increasing pace of change, the study of innovativeness will in all likelihood remain centre stage for some time to come.