The significance of the innovation cycle for better innovation policies for SMES at the firm level: a conceptual proposition

Introduction/background: This paper’s aim is to contribute to overcoming the limitations of existing policies intended to facilitate innovativeness. This article addresses the need for more tailored and targeted innovation support measures for small and medium-sized enterprises (SMEs) to help maximize their economic and societal impact. Aim of the paper: Specifically, the aim is to advance methodological frameworks for segmenting or selecting innovative SMEs by providing a conceptual proposition based on the innovation cycle at the firm level. Materials and methods: This objective is achieved by exploring the literature on the innovation cycle concept, and adapting the model developed by Abernathy and Utterback (the A–U model) for the purpose of innovation policy. Particular phases of the innovation cycle are transformed into variables and values, and based on the research regarding the behaviour of SMEs illustrative weights are assigned; this assignment depends on the preferred policy approach: either supporting innovativeness in and of itself or supporting innovativeness and an SME’s standing in the long run. Results and conclusions: As a result, the paper presents a tentative working procedure for assessing enterprises according to operationalized criteria derived from the A–U model. Added to this, collaborative efforts in developing innovations are briefly discussed from the innovation policy perspective. It is believed that the new conceptual proposition outlined in the paper will be instrumental in segmenting companies and selecting innovative projects, and will serve policy-makers and intervention organizations in the implementation phase of the innovation policy process, thus contributing to a more efficient and transparent allocation of support instruments by public institution.