Assembling capabilities for innovation: Evidence from New Zealand SMEs

Abstract

This article draws upon survey data from New Zealand small- and medium-sized enterprises (SMEs) to explore the relationship between training, collaboration and innovation performance. Based on the perspective that SME owner–managers attempt to marshal both internal and external capabilities to improve innovation outcomes, it shows that strategies which focus on internal capabilities (training) only have no tangible effect. SMEs benefit from different capability strategies depending on their age. For younger firms, accessing external resources (collaboration) has a positive effect, while older SMEs benefit from a combined strategy (collaboration and training). Training effects are context (e.g. industry or sector) dependent and contingent on a broader approach to innovation. Our findings also suggest that demographic characteristics of the owner–manager influence the capability assembling strategy and are therefore, an important contingency for the innovation performance of SMEs.