Institutional aspects of innovation

• Hypothesis 7:Innovation depends on the availability of external capital, information, technology, cooperation and

qualified personnel
---Smaller firms cannot go in for innovations
---Technology and availability of capital is just few of the
aspects of innovation. Moreover ,the customer or market is the driving force behind any innovation.

Rizzoni found 6 types of small firms depending on their orientation towards technological innovations:1-2 traditional firms 3-4 cooperating firms 5-6 technology based firms .

leadership etc . and in larger firms more from the availability of resources like external capital and qualified personnel --Large firms have material advantage and small firms have behavioral advantage -.Innovation in small firms depends more on entrepreneur's characteristics like future orientation.Institutional aspects of innovation • Hypothesis 8:Innovation in small firms profits from their flexibility and creativity.

-.Institutional aspects of innovation • Hypothesis 9:Innovation in small firms emphasizes new products and processes.Medium and large scale firms show higher levels of innovation than small firms. whereas innovation in larger firms emphasize more R&D. .

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