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

Despite an increasing scholarly attention on innovation in small- and medium-sized enterprises (SMEs), we still know relatively little about the factors motivating and supporting innovation in such firms. This qualitative study joins this conversation by investigating the controversial role played by networks in fostering innovation in the specific context of micro-firms. Building on 32 semi-structured interviews conducted with micro-entrepreneurs and network managers, our results identify several influencing factors carrying both a positive and a negative effect on innovation and detect three main ways in which micro-entrepreneurs make sense of the network’s influence on the overall innovation process. This study offers two primary contributions. First, we shed light on the varying effects of the network’s characteristics on innovation in micro-firms. Second, we further our understanding of how micro-entrepreneurs frame the role of networks in driving innovation. Thus, we develop a framework on the joint effect of network-level characteristics and the micro-entrepreneur’s sensing of the network’s role as key drivers of the impact of networks on innovation in micro-firms.