Firm Innovativeness in Smes: Lessons from Japan

Fostering greater firm innovativeness may just be the most critical advantage organisations must develop to effectively compete in the markets of not only today, but those of tomorrow as well. The connection between volatile and dynamic environments and the need for firms to be more innovative is oft made, and Japan in particular has faced trying conditions, experiencing perhaps the most prolonged recession any developed country has witnessed since the Great Depression. This article reports on research undertaken into the underlying components of firm innovativeness in Japanese SMEs. Ten case studies were developed building on results of a quantitative study of over 2000 Japanese SMEs which investigated the underlying components of firm innovativeness. Findings from the case studies support and extend results of the quantitative study, detailing critical associations amongst management and firm employees, individual firm members, groups and work teams, leaders and mentors, along with firm environment issues including regional systems of firm agglomeration and consumer and market uncertainty; associations which have significant impacts on a number of levels in regard to firm innovativeness.