THE SWEDISH PARADOX REVISITED – WHY CANNOT SWEDISH SMES INNOVATE? - A literature review on Swedish SMEs’ inability to innovate

Abstract: Aim and Purpose The aim of this study is to examine Swedish SMEs’ inability to innovate against a framework of four barriers to innovation as presented by Mark S. Freel; Financing, Management and Marketing, Skilled Labour, and External Information and Linkages. Furthermore, the thesis will determine whether or not the four factors combined are useful in explaining the low innovation intensity of Swedish SMEs. Method The study seeks to answer the questions at issue by means of a literature study. It comprises research conducted on Swedish SMEs which is then evaluated towards the four-factor framework, using international research. This thesis relies exclusively on previously conducted research and no new data is presented. Results and Conclusion The research has found that Financing, and External Information and Linkages are to be considered major barriers to innovation for Swedish SMEs. Management and Marketing, and Skilled Labour are to be considered less prominent barriers however. This leads to the conclusion that the framework of the four factors presented by Freel is not very useful in describing the low innovation intensity of Swedish SMEs.