SME innovation in Zhejiang, China: Potential constraints to development of widespread innovation

Darryn Mitussis

doi:10.1108/17561411011032007

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Journal of Knowledge-based Innovation in China

ISSN: 1756-1418

Online from: 2009

Subject Area: Enterprise and Innovation

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SME innovation in Zhejiang, China: Potential constraints to development of widespread innovation

Document Information:
Title:	SME innovation in Zhejiang, China: Potential constraints to development of widespread innovation
Author(s):	Darryn Mitussis, (Nottingham University Business School, University of Nottingham, Nottingham, UK)
Citation:	Darryn Mitussis, (2010) "SME innovation in Zhejiang, China: Potential constraints to development of widespread innovation", Journal of Knowledge-based Innovation in China, Vol. 2 Iss: 1, pp.89 - 105
Keywords:	China, Entrepreneurialism, Innovation, Small to medium-sized enterprises
Article type:	Conceptual paper
DOI:	10.1108/17561411011032007 (Permanent URL)
Publisher:	Emerald Group Publishing Limited
Acknowledgements:	Data gathering were funded as part of a project sponsored by the East Midlands Development Agency. The author is indebted to Chang Le and Lu Xi, who acted as research assistants and translators during the interviews and to Dr Dylan Henderson of CM International for guidance and input during the data gathering. An earlier version of this paper was presented at EURAM 2009, and the comments of the conference paper reviewers and track participants, along with those from the journal reviewers and editor, have been most useful.
Abstract:	Purpose – The purpose of this paper is to critically examine the barriers to innovation in Chinese small and medium enterprises (SMEs). Design/methodology/approach – Interviews with 39 SME owner-managers, industry bodies and relevant government authorities were gathered and analysed. Findings – The key finding is that Chinese SMEs may be at risk of being stuck in a high-level equilibrium trap and that the improving macro-environment might not change embedded innovation constraining hierarchical management and guanxi networking. Originality/value – Key contribution is the characterisation of Chinese SMEs as stuck in an equilibrium trap along with a description of the conditions that cause it. Importantly, this paper explores these issues by juxtaposing macro-environment conditions with the rational firm-level behaviours that they prompt.