Innovation Adoption for Small- and Medium-Sized Enterprises

Subject: Entrepreneurship
Pages: 1
Words: 380
Reading time:
2 min


For this research, I chose to analyze the importance of innovation adoption and its varying effect on small- and medium-sized enterprises (SMEs) and their customers. Innovation and the development of new technologies are particularly hard for smaller firms due to financial risks and information asymmetry (Limaj & Bernrodier, 2019). The abundance of new technologies can be confusing, and companies put themselves into a risky position when adopting new technology or approach. Numerous technology development and implementation strategies exist, varied by their drivers, depth, and breadth of changes, making it easier for a smaller company to adapt, yet they require careful analysis of the situation (Koul & Eydgahi, 2017; Magistretti & Dell’Era, 2018). It is impossible to satisfy customers’ expectations with the existing product in the face of ever-changing demands (Chen et al., 2018). Smaller companies have a higher need to analyze the reasons behind innovation adoption.

Main body

Inspired by the success of the largest players on the market, companies continue to try to adopt this highly risky company strategy. In the example of the usage of drones by Amazon, which has proven to be more cost-efficient, environmentally friendly, and faster, it can be observed that technology adoption can give a company a significant competitive advantage (Yoo et al., 2018). Limaj and Bernrodier (2019), on the other hand, state that capacity for innovation is limited and that “a balance between exploratory and exploitative innovation” is necessary for SMEs to remain stable and responsive to market changes (p. 146). A company’s internal focus on innovation positively affects the chances of success, but it requires a synergy between organizational and technological skills with customer relations (Anzola-Román et al., 2018). While small companies sometimes gain a significant competitive advantage from taking risks with innovation, it is not the optimal strategy for the majority of SMEs.


In conclusion, innovations can be both beneficial and detrimental to a company’s success, and there is a need for a thorough assessment of every technology before its acceptance. The key customers of a company must know that they can benefit from the adoption of a particular innovation for a firm to achieve any success with new technology (Rajapathirana & Hui, 2018). A firm needs to establish contact with its customers and convince them to accept novelty.


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