Non-R&D innovation in SMEs: An empirical study from China

For a long time, R&D had been largely equated with technological innovation by both academia and enterprises, sometimes even been regarded as the only effective way of innovation. However, ample empirical studies in recent years showed that, some of the innovative firms, especially small and medium sized enterprises (SMEs), often use many other innovative methods to win the competitive advantages. EU´s surveys in recent years even indicated that over half of European innovative firms did not perform formal R&D. Based on a survey of 398 Chinese SMEs in 2012, this paper tried to develop a preliminary theoretical framework for SMEs´ non-R&D-based innovation practice in the Chinese context, as well as main patterns of SMEs´ non-R&D innovation, such as technology adoption, imitation, marketing innovation and etc. Through our empirical study, we find that non-R&D innovation activities have significant positive impacts on SMEs´ innovation performance. Meantime, good absorptive capacity also helps to improve innovation performance of SMEs. Firms with better absorptive capacity would have better innovation performance when doing marketing innovation. However, firms may act worse with better absorptive capacity when doing technological non-R&D innovation.