Innovation in SMEs and its support through ICT: what effects on performance?

Abstract

Firms’ innovativeness and their ICT resources are seen as two factors of firms’ competi-tiveness. Our research tests these sources of performance in the context of small-and-medi-um enterprises (SMEs) and examines possible synergies with ICTs supporting innovation.Our research is based on a double empirical investigation: a survey is conducted amongfirms in the region of Brittany (France), complemented with an online investigation oftheir financial performance. With a final sample of 1086 firms, we perform an economet-ric assessment of SMEs performance, explained by their innovativeness, their ICT resources(skills and assets) and the combined effect of their innovativeness supported by ICTs. Theinteraction variable capturing the combined effect constitutes the major methodologicaloriginality of our research. Our investigation shows that ICTs contribute to performanceimprovement when supporting innovations: SMEs’ innovativeness positively influences per-formance when it is accompanied by specific investments in ICTs or by more intensive useof existing ICTs in the firm. However, innovativeness and the level of ICT resources have adirect negative effect on SMEs’ financial performance. We discuss these results in the spe-cific SMEs organizational context