Competence barriers to innovation : A study on small enterprises

Abstract: Innovation is, in most cases, a necessity for firms in today’s changingmarket place. It has the potential to offer firms numerous advantages,including increased profit and growth. However, innovationis no easy process and there are many barriers and impedimentsto innovation that needs to be overcome in order to efficiently innovate.A study conducted by Vinnova (2007) showed that 18% ofSMEs consider a shortage of qualified personnel as a high barrier toinnovation. How are competence barriers to innovation experienced by smallenterprises in the selected sample? Do competence barriers to innovationvary depending on different firm characteristics and in thatcase how? Which consequences do small enterprises encounter as aresult of facing competence barriers to innovation? Are small enterprisesthat face high competence barriers to innovation more likelyto encounter consequences? The purpose of this research report is to investigate competencebarriers to innovation within small enterprises and the consequencesthese barriers might result in. Competence barriers to innovation are considered moderate in thissample. The highest barrier was shortage of qualified personnel necessaryfor innovation. In general, small enterprises that experienceda higher level of competition also faced higher competence barriersto innovation. The most frequently reported consequences fromfacing competence barriers to innovation were; inability to acceptcertain jobs or contracts, decreased profitability and difficulty in expandingthe business. Small enterprises which face higher competencebarriers to innovation are more likely to encounter consequences.