Title: Innovation activity of SMEs in different locations

Authors: Esa Storhammar; Timo Tohmo

Addresses: Jyväskylä University School of Business and Economics, University of Jyväskylä, P.O. Box 35, FI-40014, Finland ' Jyväskylä University School of Business and Economics, University of Jyväskylä, P.O. Box 35, FI-40014, Finland

Abstract: Tödtling and Trippl (2005) argue that innovation activity is a key element in regional economic development (see also Rondé and Hussler, 2005; Audretsch and Lehmann, 2005; Cooke, 2005). However, we know little about the formation, development and diffusion of innovations in different milieux. The aim of this study is to clarify the factors - in particular, the regional factors - that affect the innovation activity of small and medium-sized enterprises (SMEs). Our analyses of the innovation activity of Finnish SMEs revealed that innovation activity is very brisk in towns and relatively brisk in rural areas, although the difference between the two was not statistically significant. A logistic regression analysis provided support for the assumption that there is more innovation activity in small towns than in sparsely populated areas. The logistic regression analysis indicated the observed differences in innovation activity among SMEs are primarily due to differences in the companies rates of growth, networking, and strategies.

Keywords: innovation activity; SMEs; small and medium-sized enterprises; regional factors; local environment; networking; Finland; economic development; regional development; urban areas; rural areas; small towns.

DOI: 10.1504/IJIRD.2013.059858

International Journal of Innovation and Regional Development, 2013 Vol.5 No.3, pp.243 - 265

Received: 30 Aug 2012
Accepted: 29 Nov 2012
Published online: 02 Jul 2014 *

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