Research On SMEs Innovation’s Risk And Performance

Since the21st century, dramatic changes have taken place in the external environment, small and medium-sized enterprises (SMEs) in the traditional industry have received the serious threat to the survival and development. SMEs should innovate in product, process, marketing and organization to establish a new competitive advantage and be in an impregnable position in the market. Under the background of a growing willingness and pressure to innovate, various kinds of innovation practice activities are springing up constantly, it is very important practical significance for SMEs that how to identify and prevent innovation risk, how to improve the success rate of innovation, and how to make successful innovation to promote enterprise performance, and then strengthen enterprise’s survival ability and competitive power.This study based on the related theory of low-and medium-technology (LMT) industries’innovation, SMEs innovation, innovation risk factors, and the relationship between innovation and business performance, through the survey of current innovation of small and medium-sized manufacturing enterprises in Zhejiang and the investigation of the status quo of the innovation management of small and medium-sized textile enterprises in Shaoxing, and the survey of the203small and medium-sized textile enterprises’innovation in Zhejiang, used a variety of quantitative empirical analysis method to identify product innovation, process innovation, marketing innovation and organizational innovation’s key risk factors, analyze the relations between all kinds of innovation and business performance and explore the mechanism of the innovation influencing enterprise performance, assess the risk level of innovation risk factors and risk consequences (including all kinds of innovation cannot be achieved and enterprise performance cannot be achieved), and finally put forward some countermeasures from the micro and macro level for SMEs innovation. The main conclusions of this study are as follows:(1) SMEs innovation is influenced by a total of11key risk factors from the enterprise external and internal. External risk factors include technical information, market information, technical cooperation, marketing cooperation and market characteristics; internal risk factors include management skills, technical skills, skills matching, innovation capital, innovation management and innovation culture. These key risk factors influence the realization of all kinds of innovation in SMEs.(2) There are different sets of the key risk factors among different types of innovation in SMEs. Product innovation has the most key risk factors, all of11key risk factors related to product innovation, reflected the complexity of product innovation. Precess innovation has7key risk factors, including technical information, technical cooperation, technical skills, management skills, innovation capital, innovation management and innovation culture. Marketing innovation has7key risk factors too, including market information, marketing cooperation, market characteristics, management skills, innovation capital, innovation management and innovation culture. Organizational innovation has4key risk factors, including management skills, innovation capital, innovation management and innovation culture.(3) Product innovation, process innovation, marketing innovation and organizational innovation have significant impact on financial performance and growth performance, and the realization of all kinds of innovation promotes the enterprise performance. In the four different types of innovation, organizational innovation has played a fundamental role, it promoted the product innovation, process innovation and marketing innovation, organization innovation mainly affect enterprise performance through the other three types of innovation. Product innovation has played a central role for the other three kinds of innovation to achieve their business performance, process innovation, marketing innovation and organizational innovation having the impact on enterprise performance were achieved by product innovation either in part or in whole. Process innovation and marketing innovation on the one hand, are influenced by organizational innovation; on the other hand, through product innovation indirectly affect enterprise performance.(4) Innovativeness (innovation level) has the moderating effect on the relationship between all kinds of innovation and enterprise performance. Product innovativeness and marketing innovativeness have signallly impact on the relationship between innovation and financial performance; process innovativeness and organizational innovativeness have signallly impact on the relationship between innovation and growth performance. Compared with low innovativeness, high innovativeness promotes financial performance faster.(5) The relationship between all kinds of innovation and the enterprise performance are moderated by market competition. Market competition has signallly moderating effect on the relationship between innovation and financial performance, has not signallly moderating effect on the relationship between innovation and growth performance. Compared with the low competitive market, the highly competitive market makes financial performance ascending slowly.(6) The risk level in SMEs innovation is medium in the rough. In terms of key risk factors, technical information, market information, technical cooperation, marketing cooperation, market characteristics, management skills, technical skills, skills matching, innovation management have medium risk level, innovation capital and innovation cultural have high riks level. The higher the risk level of the key risk factors, the greater the likelihood of innovation can not be achieved. In terms of risk consequences, four types of innovation including product innovation, process innovation, marketing innovation and organizational innovation, two types of business performance including financial performance and growth performance have medium risk level. The higher the risk level of the risk consequences, the greater the likelihood of both four types of innovation and two types of business performance can not be achieved. Compared with the similar domestic existing research, the innovative achievements of this study are mainly characterized by three aspects:(1) On the object of study, this study focused on the important and overlooked LMT industries’innovation and SMEs innovation. We studied LMT industries and SMEs’innovation, to some extent enriched the theory of our country industry and enterprise innovation, showing a certain degree of theoretical innovation.(2) On the research content, this stady distinguished the four types of innovation of product, process, marketing and organization to identify the key risk factors in these innovation types, which further expanded innovation risk theory research, because of previous research mainly revolving around product innovation. This study also deepened the understanding of the relationship between innovation and enterprise performance. By distinguishing the different types of innovation and enterprise performance, bringing the relationship of different types of innovation, innovativeness and market competition into the relationship between innovation and business performance, make the research more deeply.(3) On the research framework, this study integrated the relationship among the innovation risk factors-different types of innovation-the corporate performance. Many of the past research mainly focused on the success or failure of the new product, or the relationship between the innovation and business performance. The inclusion of the relations of three to one study, both can identify the key risk factors which influenced innovation, and can be found that the mechanism of different types of innovation affect enterprise performance, then maked the stady more comprehensive.