Abstract
This article contributes to the study of process innovation as a growth strategy for SMEs, enriching and complementing the well-researched debate about product innovation. Thus, under- researched process innovation strategies are analyzed, and their antecedents and innovative performance implications explored. The results show that process innovation strategy is mainly shaped by the acquisi- tion of embodied knowledge, which acts as a key mechanism for countering firms weak internal capa- bilities. As process innovation is mainly production oriented, performance consequences are measured using the production process indicators of cost reduc- tion, flexibility and capacity improvement, avoiding traditional misguided measures based on sales, which are more product oriented. Drawing on information for 2,412 firms taken from Spanish CIS data, our results suggest that R&D efforts are not positively related to production process performance, but that the latter is improved by the synchronous co-adoption of organi- zational and technological innovation. SMEs conduct- ing a process innovation strategy rely heavily on the acquisition of external sources of knowledge in order to complement their weak internal innovative capa- bilities, and their pattern of innovation shows clear-cut differences from traditional R&D-based product inno- vation strategies. The article uses a resource-based view framework to generate hypotheses
