SME development strategy and product/service innovation intention: A NCaRBS analysis of the role of uncertainty

Abstract

Small and medium-sized enterprises (SME) are tasked with driving economic recovery globally, in terms of contribution to economic growth. Understanding the determinants of SME innovation is essential in clarifying this phenomena. This study investigates the link between SME strategies and intention to undertake future innovation, using Federation of Small Businesses data. The analysis employs the novel N-State Classification and Ranking Belief Simplex (NCaRBS) technique, investigating relationships between changes in SME strategies, including staffing levels, importing/exporting and client base, and future (including uncertain) innovation intentions. NCaRBS can analyse an incomplete data set, with missing values in the considered characteristic variables, without the need to manage their presence. NCaRBS can also generate results providing insights into SME behaviour regarding strategy and innovation, while also increasing learning about potential reasons behind SMEs uncertainty regarding innovation intention. The study provides novel perspectives into how SMEs develop innovation intentions and the strategies required to support/exploit such intentions, of value to academia, enterprise support agencies and policymakers.