New Product Development Among Small Toronto Manufacturers: Empirical Evidence on the Role of Technical Service Linkages

Abstract

This paper examines the technical linkage arrangements which exist between small Toronto manufacturers and consultants in the service sector. It is suggested that technical inputs from external specialists contribute significantly to the innovation performance of small firms that produce for export. Detailed evidence from a sample of local manufacturers is used to highlight the extent of inter-firm contact networks. While the empirical findings suggest a positive relationship between small firm innovation and backward links to producer service units, patterns of subcontracting are found to be less extensively developed than they could be. The paper concludes with a series of broad recommendations for future public policy and industrial strategy design.