An Investigation of Innovation Capability in Small and Medium-sized Enterprises of China

Over the last decades, small and medium-sized enterprises (SMEs) have grown exponentially and become a key element in China's economy. The purpose of this paper is to conduct a compararive evaluations of innovation capabilities status of SMEs in China across different sectors. Six dimensions of innovation capability that influence mostly NPD performance of firms are identified, such as technology, organization, strategy, organizational climate, manufacturing and marketing. A practical survey was carried out in the manufacturing industry of Zhejiang Province. We find that in different firm sizes and development stages SMEs have significant disparities in intensity of different capability dimensions respectively. Medium firms has higher scores in all of innovation capability dimensions than small firms. The bottleneck of capabilities in small firms are found in Org_Process, M_S, and MKT_S. All of firms in three stages are consistently adept in MKT_L, Climate_L, and lack in Org_Process; Mature firms exhibit the greatest level in all of innovation capability dimensions, and growing firms and startup firms are lower in sequence.