Towards Understanding Strategic innovation in Small & Entrepreneurial Clean Technology firms. Exploring capacity, arenas and outcomes

Abstract: Background and problem: The realities of our knowledge-based society have dramatically changed the prerequisites for business strategy and competition. Today, Strategic Innovation (SI), i.e. the ability to radically change the rules of the game, is required in order to cope with the new economic landscape. Small and entrepreneurial Clean Technology (CleanTech) firms are of central interest to study in this context, due to their ability to advance our future green economy. Purpose: The purpose of this paper is to investigate how small and entrepreneurial CleanTech firms manage SI, by answering four research questions: 1) what model could describe a holistic approach to SI in a CleanTech context, 2) what is the capacity for SI among small and entrepreneurial CleanTech firms, 3) how has SI been attained by small and entrepreneurial CleanTech firms, and 4) what SI outcomes have small and entrepreneurial CleanTech firms achieved to date. Method: This exploratory study applies a qualitative research strategy, based on ten semi-structured interviews with small and entrepreneurial CleanTech firms, as well as one unstructured interview with a subject matter expert from the Technical Research Institute of Sweden (SP). The sample includes Gothenburg-based CleanTech firms that were selected from a list published by the Swedish Agency for Economic and Regional Growth (Tillväxtverket). Research implications: This study presents an adjusted model for SI in a CleanTech context, where the new contributions incorporate an increased attention to learning, additional arenas for SI, access to large-scale development projects and a new type of SI output. In addition, several conclusions are presented regarding the companies’ capacity for and outcomes of SI. Practical implications: First, companies are recommended to establish a questioning attitude and challenge both corporate and industry boundaries. This can be achieved by a shift from the current inside-out approach to an outside-in approach, where external actors are utilized to a greater extent. Second, this paper proposes a more exploratory approach to strategy. Third, companies are encouraged to follow non-customers more closely. Last, companies are recommended to develop ‘loaded expressions’ in order to communicate the value of their products/services more efficiently.