Exploring innovation in regional manufacturing SMEs

ABSTRACT

Continuous change and increased business complexity pose unique challenges to Small and Medium Enterprises (SMEs) to develop and sustain competitive advantage. These challenges are even more pronounced for SMEs in isolated regional areas, especially those that operate in the declining manufacturing industry. This paper explores key factors that regional SMEs draw on in their quest to survive and innovate in a changing business environment. Based on a qualitative interpretive research design, empirical evidence was gathered through personal interviews with business owners/managers of 19 regional Australian manufacturing SMEs. Three interrelated innovation factors were identified: (i) an emphasis on developing knowledge; (ii) openness to continuous learning; and (iii) engagement in social networking with various stakeholders. In addition, information technology plays an enabling and supportive role in strengthening regional manufacturing SMEs’ ability to be more innovative. Based on these findings, four propositions are suggested indicating how SMEs can use knowledge to foster innovation in a challenging and competitive business environment.

KEYWORDS:

• SME
• regional
• manufacturing
• innovation
• knowledge
• learning
• social networks
• information technology

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes on contributors

Nina Evans is Associate Head of the School of IT and Mathematical Science (ITMS) at the University of South Australia in Adelaide. She holds tertiary qualifications in Chemical Engineering, Education and Computer Science, as well as a Masters in Information Technology, an MBA and a PhD. Her teaching and research interests are Knowledge Management, Small business and Entrepreneurial Enterprises, Social networks/media in regional SMEs and IT leadership. She has published in numerous academic journals and delivered presentations at international conferences and industry workshops.

Rachelle Bosua is a Senior Lecturer in the Department of Computing and Information Systems at The University of Melbourne in the Melbourne School of Engineering. She received her PhD in 2008 from the University of Melbourne. Her primary research areas are knowledge management, knowledge strategy, knowledge sharing and transfer, social networks, social media technologies and knowledge leakage.

Notes

1 RDA’s are non-profit community-based organisations that are part of a national network of regional agencies that aim to develop a globally competitive economy for regional communities through fostering of sustainable business industries.

Additional information

Funding

This work was supported by auDA Foundation [grant number 6104939: 11893856_1].