Innovation adoption and training activities in SMEs

Abstract

This article adopts the resource-based view and the complementarities approach to examine how small and medium enterprises (SMEs) combine the adoption of organisational and technological innovation with investments in training activities. The results of econometric analysis on a panel data-set of about 118 Italian manufacturing SMEs furnish a quite complex picture of the effects of innovation on training. On the one hand, organisational innovation seems to be related to higher investments in (formal and informal) internal training; specifically, it is the adoption of autonomous teams and multi-skilling practices that is associated with the coverage and the intensity of internal training, whereas job rotation is negatively associated with the coverage of external training. On the other hand, the general index of technological innovation does not show any significant relationship with training activities, whereas the individual technological innovation variables are associated with internal training. Specifically, the coverage of internal training is positively affected by ICT innovation and negatively affected by process innovation. These results demonstrate that SMEs have limited awareness of the risks associated with underinvesting in training during the implementation phase of the innovation process. The implications of such findings for research and practice are discussed.

Keywords::

• Italy
• organisational innovation
• SMEs
• technological innovation
• training

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

^1. Similar to this is the OECD's definition of technological and organisational innovation as reported in the Oslo Manual (OECD, 2005).

^2. As far as endogeneity due to simultaneity is concerned, two main problems hampered the possibility to cope with it fully: the first was the lack of appropriate instruments in our data-set; the second was the very short time dimension (T = 2), which in practice prevented us from using at least a first difference approach including lagged values of the innovation variables in a first-difference specification of our model (Caroli & Van Reenen, 2001).

^3. The results from the SUR specifications are available from the authors upon request.

^4. The results are available from the authors upon request.