How micro-firms innovate: A qualitative study on the role of networks

Despite the increasing scholarly attention to how small businesses innovate, we still know little about the factors that motivate and support innovation in such firms. Drawing upon the relational view perspective, this qualitative study joins this conversation by investigating the controversial role played by networks in affecting innovation in micro-firms active in “traditional” industries, in which continuity with the past is highly important. Building on 32 semistructured interviews with crafts micro-entrepreneurs and network managers, we identify several factors that have effects on innovation and detect three main ways in which micro-entrepreneurs make sense of the influence of networks on the overall innovation process. This study offers two primary contributions. First, we shed light on the varying effects of the network characteristics on innovation in micro-firms. Second, we further our understanding of how micro-entrepreneurs frame the role of networks in affecting innovation. Thus, we develop a framework on the joint effect of network-level characteristics and the micro-entrepreneur’s sense of a network’s role as key drivers of the impact of networks on innovation in micro-firms.