With the advent of globalization and the knowledge economy, an important issue has arisen concerning the relationship between the strategic capabilities of SMEs and their capacity to innovate. From a contingency perspective, one would argue that the firm's strategic capabilities can be leveraged for the purposes of innovation to the extent that these capabilities are in strategic co-alignment. This gives rise to the following empirical research questions: (a) are the networking, R&D and technological capabilities of SMEs co-aligned such that one can observe different organizational gestalts, and (b) does co-alignment of these capabilities lead to a successful outcome in terms of innovation? In answer to these questions, the authors present the results of a study of 205 Canadian manufacturing firms. Through cluster analysis, three gestalts are identified – entrepreneurial SMEs, engineering SMEs and administrative SMEs. Analysis of these gestalts indicates that entrepreneurial SMEs clearly lead the other two in R&D capability and product innovation.
Determinants of Innovative Activity in Canadian Manufacturing Firms: The Role of Intellectual Property Rights
