Non-R&D Innovation Patterns in Chinese SMEs: An Empirical Study from Zhejiang Province

During the last few decades, research and development (R&D) have always been regarded as the most important or even the only factor in the attempt to explain the innovation capability and performance of enterprises, industries and economies, while to a large extent, those heterogeneous innovation activities beyond formal R&D are ignored or underestimated. Some research has shown that non-R&D innovation activities contribute to make full use of resources beyond R&D to promote performance, especially to small- and medium-sized enterprises (SMEs) with weak R&D capability. However, non-R&D innovators’ behavior is still a black box by far, and especially few empirical research have been conducted in China context. This paper first explores the heterogeneous innovation patterns of non-R&D innovation by survey among Chinese SMEs in Zhejiang Province. It shows that, product and service customization, imitation and design, technology adoption and incremental modification, organizational innovation and marketing innovation are the main patterns of non-R&D innovation in China. Then, a case study is followed to cross-validate the patterns and relationships between non-R&D innovation and growth of SMEs in China. Generally, this study has implications for both academia and policy-makers. As it demonstrates, non-R&D innovation is an effective way for SMEs to quickly grow and sustain competitiveness in competition. On the other hand, this study helps to optimize some of current innovation policies for SMEs in China, where policy incentives are mainly R&D-focused. It also likely sheds light on the SMEs in other emerging economies.