Innovation development process in small and medium technology-based companies

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Availableonlineatwww.sciencedirect.com

http://www.revistas.usp.br/rai RAIRevistadeAdministraçãoeInovação13(2016)176–189

Innovation

development

process

in

small

and

medium

technology-based

companies

Fabiana

Matos

da

Silva

a

,

Edson

Aparecida

de

Araujo

Querido

Oliveira

b,c

,

Marcela

Barbosa

de

Moraes

c,d,∗

a_Management_and_Regional_Development_by_the_University_of_Taubaté_(UNITAU),_Taubaté,_SP,_Brazil b_Aerospace_and_Mechanical_Engineering_by_{Technological}_Institute_of_Aeronautics_(ITA),_São_José_dos_Campos,_SP,_Brazil

c_Graduate_School_of_Management_at_the_University_of_Taubaté_(UNITAU),_Taubaté,_SP,_Brazil d_Management_by_the_University_of_Nove_de_Julho_(UNINOVE),_São_Paulo,_Brazil

Received29October2015;accepted11April2016

Availableonline19June2016

Abstract

Smallandmedium-sizedtechnology-basedcompaniesarerecognizedasessentialfortheeconomyandbusinessactivity.Thepurposeofthisarticle istostudyhowthetechnologicalinnovationprocessoccursinsmallandmediumtechnology-basedcompanieslocatedinthemetropolitanregion oftheParaíbaValleyandNorthCoast–Brazil.Thetheoreticalframeworkusediscomposedbysixourmodelsofinnovation:thetechnologypush, themarketpull,thecouplinginnovationprocess,thefunctionalintegrationinnovationprocess,thesystemsintegrationandnetworkinginnovation processandopeninnovation.Itwasusedinthisresearchthemultiplecasestudieswithaqualitativeapproach.Datawerecollectedthrough semi-structuredinterviewswithowner-managers.Thesampleconsistedoffoursmallandmediumtechnology-basedcompaniesofmetropolitanregion oftheParaíbaValleyandNorthCoast–Brazil.Inthedataanalysis,therewasanintraandcrosscaseanalysisinordertoverifythesimilarities anddifferencesofthecasesstudied.Asaresultofobservationofinnovationdevelopmentmodelsadoptedbycompanies,itappearsthatthemodel isclosertowhatwasproposedinthechaininteractionsmodel.Thedevelopmentofinnovationdependsonthetypeofeconomicactivitythatis developedbythecompanyandtheinteractionsithaswithinternalandexternalenvironment.Itwasconcludedthatthesmallandmedium-sized technology-basedcompaniesdonotinnovateinasystematicway,butintuitivelyandveryfocusedontheideasofitsfounders.Theyinnovate focusingformeetingtherequirementsofcustomersandtheneedsobservedinthemarket.Theformationofpartnershipsisstillviewedwarilyby theleadersandowners.

©2016DepartamentodeAdministração,FaculdadedeEconomia,AdministraçãoeContabilidadedaUniversidadedeSãoPaulo–FEA/USP. PublishedbyElsevierEditoraLtda.ThisisanopenaccessarticleundertheCCBYlicense(http://creativecommons.org/licenses/by/4.0/). Keywords: Management;Development;Innovation;Smallenterprise;Mediumenterprise;Technology-basedcompany

Introduction

For centuries, innovation has been a phenomenon that serves a single purpose: to make life more comfortable for humans (Kotsemir & Meissner, 2013). Complementing this idea, Leiponen and Helfat (2010) argue that many times the

∗_{Corresponding}_author.

E-mail:[email protected](F.M.Silva).

PeerReviewundertheresponsibilityofDepartamentodeAdministrac¸ão,

Fac-uldadedeEconomia,Administrac¸ãoeContabilidadedaUniversidadedeSão

Paulo–FEA/USP.

innovationcontributestothesurvivalofnotonlyindividualsbut alsoorganizationsasawhole.

Giventhisstatement,innovationprocessesarefundamental togivecompetitivestrengthtocompanies.Innovationsactions undertakeninthisprocesscanbemotivatedbyentrepreneurial intentions as to meet new market demands; to add value to existingproductsandservices;andtogeneratenewproductsor services.Suchactionsreflectorganizationalcompetenciesthat renewthecompetitivevigorandcontributetothelongevityofthe enterprise(Freeman&Soete,1997;Leiponen&Helfat,2010). Tounderstandhowinnovationoccursinsmallandmedium enterprises (SMEs), two essential processes are shown: the http://dx.doi.org/10.1016/j.rai.2016.04.005

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acquisition of new knowledge and design of new working method on the lines of production of goods and services. Therefore,for innovationtooccurs,itisnecessarytodevelop management systems and exploration of subjective capital, whichisknowledge,whichcanbeappliedforuseof organiza-tionalresourcesallowinganewproductionprocess(Leiponen &Helfat,2010;Musiolik,Markard,&Hekkert,2012).

Toexplaintheoccurrenceofinnovationbasedonthese pro-cesses, some authors like Myers and Marquis (1969), Kline (1978), Rothwell and Zegveld (1985), Kline and Rosenberg (1986), Rothwell (1992) and Chesbrough (2003) developed explicativemodelsmade upof differentstages,where knowl-edgeismanagedinordertofacilitatesuchinnovation.Oneof theadvantagesofworkingwiththesemodelsisthepossibilityof detailedunderstandingoftheoriginsofknowledgeusedasthe basisforinnovation,suchasappliedresearch,scientificresearch andmarketneeds(Lobosco,Moraes,&Maccari,2011;Viotti& Macedo,2003).

Innovationdevelopmentprocesscanvaryfromenterpriseto enterprise,beinginfluencedby,amongotherthings,bythesector ofactivityorbythesizeofthecompany(Conde&Araújo-Jorge, 2003).Atthispoint,thatemergesthefocusofinterestof this research,whichcomestotheinnovationdevelopmentprocesses inSMEs. SMEs present aleaner andmore flexiblestructure whencomparedtolargecompaniesandcanbeconsideredmore organicthanmechanical(Mintzberg,1989).

In thevariousclassifications of SMEsthatexist, thereare calls small andmedium technology-based companies, which serveuphighlyskilledworkforce andfewhierarchicallevels, fewdepartments,whentheseexist,andproximitytocustomers. Thismeansthat, intermsof innovationdevelopmentprocess, presentapotentialtomanageknowledgemorequicklythanlarge companiessothatbecreatednewproductiondrawings(Moraes &Lima,2014).

Inthecontextofregionaldevelopment,itshouldbe empha-sized the economic and social benefits that these companies providetotheregion,especiallywithregardtotheprocessof industrialization,searchforcompetitivenessandscientificand technologicaldevelopment(Berté,2006).Innovationalso pro-pitiatesanewopportunitytoinfluencethemarketdirectionin whichtheorganizationisinsertedbydifferentattributes devel-oped in marketed products, which represent a new business perspective(Schreiber&Bohrer,2014).

The literature review that supports the present paper did notallow us toidentify researchthat explainsthe innovation developmentprocesses specifically of the small andmedium technology-basedcompanies.Giventheimportanceofthe sub-jectand the apparent lack of treatment in bothnational and internationalliterature,thisstudyisjustifiedbyitspotentialto generatenewknowledgerelevanttothesearchfor answersto thefollowingresearchquestion:

How the innovation process occurs in small and medium technology-basedenterpriseslocatedinMetropolitanRegionof ParaíbaValleyandNorthCost–Brazil?

Thispaperisdividedinto5chapters.Thefirstisaboutthe introductionofthechapterinwhichhighlightstheresearch ques-tionthatguidedthisresearch.The secondchapterisasurvey

in the literatureon the evolution of the understandingof the innovation process.The third explainsthe methodologyused intheresearch.Thefourthchapterhighlightstheanalysisintra andcrosscasesfollowingthepreceptsofMilesandHuberman (1994)andthelastchapterdealswiththediscussionoftheresults andtheconclusionofthestudy.

Evolutionofcomprehensionofinnovationprocess

The evolution of innovation is characterized by the high complexityof actionsrequiringan unorthodoxandintegrated thinking, which results in social acceptance (Kotsemir & Meissner, 2013). Thereby, the term innovation includes new technological, economic, social and organizational solutions thatarenotnecessarilymarketable,intheeconomicsenseand directmonetaryimpact,butareapplicableandarebeingused withinorganizations.

SomeauthorslikeNobelius(2004),OrttandVanDerDuin (2008)andKotsemirandMeissner(2013)describetheprocesses ofinnovationinsixgenerationsofdifferentmodels,asshownin Table1.Thesemodelsvaryinthenumberandformatofstages oftheinnovationprocess;however,ingeneral,threemainsteps canbedistinguished:

(a) Idea(orinvention)of“somethingnew(product,serviceor process(organizationalortechnological));

(b) Development(production,“doing”)of“somethingnew”; (c) Commercialization (diffusion, “selling”) of “something

new”.

WhenanalyzingTable1,itwasverifiedthatthefirstmodelto ariseisthetechnologypushmodel,whichisconsideredasthe oldestmodel amongmodels ofinnovation (Viotti&Macedo, 2003).Inthismodel,thedevelopment,productionand market-ingofnewtechnologiesareseenasawell-definedsequenceof time,whichoriginatesinresearchactivitiesinvolvedinproduct developmentandleadstotheproductionphaseandeventually themarketing(OCDE,1992)exemplifiesthismodelinFig.1.

Innovationisseenasalinearprocessanditisassumedthatis byintensivescientificinvestmentsproducesignificant innova-tions.Thechallengeformanagersistoinvestmoreinresearch anddevelopment,whichthisgenerationworksinisolation.

Themarketpullmodelcanobservetheexistenceofconcern tothemarketneed,andthisisthemaindifferenceofthelinear model.Fig.2illustratesthestepsinthemodel.

Themarketpullmodelisbornwiththeinvestigationofthe needsmarket,passthroughtheresponsibledepartmentforthe researchanddevelopment(R&D)thatstudies,analysesandthe processofgeneratingofnewideasandsubsequently develop-mentoftheseideas(Myers&Marquis,1969).

What drawsattention isthe importanceof marketdemand factorofthisprocess,whichisequivalentnotignorethe influ-enceoffactorssuchasthescientificbasisandtheinternaland externaltechnologicalconditionstothefirmoninnovation.In themarketpullmodel,thereisaquestionofdemandorsupplyof technicalprogress,absentingquestionsaboutotherdeterminants oftechnologicalchange.

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Table1

Evolutionofinnovationmodels.

Generation Period Authorsof

fundamentalideas

Innovationmodel Essenceofthemodel

1 1950-s–late1960-s Usher(1954,1955) Technologypush Linearprocess

2 Late1960-s–first

halfof1970-s

MyersandMarquis (1969)

Market[Need]pull R&Doncustomerwishes

3 Secondhalfof

1970-er–endof

1980-s

RothwellandZegveld (1985)

Couplingmodel Interactionofdifferent

functions

4 Endof1980-s–early

1990-s

KlineandRosenberg (1986)

Integratedmodel Simultaneousprocesswith

feedbackloops;

“Chain-linked”Model.

5 1990-s Rothwell(1992) Networkingmodel Systemintegrationand

networks(SIN)

6 2000-s Chesbrough(2003) Openinnovation Innovationcollaborationand

multipleexploitationpaths.

Source:KotsemirandMeissner(2013).

Basic research Applied research Technology demand Technology offer Technology development Product development Production and marketing

Fig.1.Technologypushmodel.

Source:ViottiandMacedo(2003).

Market needs Idea generation Development of idea Product development Production and marketing

Fig.2.Marketpullmodel.

Source:Barbieri(2003).

Thethirdgenerationoftheinnovationprocessknownas cou-plingmodeloccurredinthe 1970stothe1980sandlooksfor thebalancebetweenresearch,developmentandmarket needs (Rothwell,1994). Rothwell andZegveld (1985) describethe coupling model as a logical, continuous sequential process, whichcanbedividedintoaseriesofdistinctphases,butinteract andhaveinterdependentstep.

Theneedidentifiedinthemarket,addedtoanew technol-ogyof researchcentersgenerateanewidea,whichinturn,is developedbyresearchers.Duetotheconstantmonitoringofthe stateoftheartintechnologyandproductionand,consequently, ofthesocietyandmarketneeds,anewproductisdevelopedand putonthemarketasdepictedinFig.3.

The linear model is theoretically exceeded as reporting Godinho(2003),butthisremainsunconscious,isoftendetected inmeasures,andprogramsfocusedforScience,Technologyand Innovation(ST&I).Adoptingthislinearconceptofinnovation couldinducetothe conclusionthathighinvestmentsinbasic researchwouldreflectpositivelyoneconomicgrowth.

Toovercomethelimitationsimposedbylinearapproaches, therearenon-linearandinteractiveapproaches,which empha-sizethecentralroleofdesign,theeffectsoffeedbackbetween

thevariousstagesofthelinearmodelandthevarious interac-tionsbetweenST&Iinallphases,surpassingthemorerestricted viewofthelinearmodeloftheinnovativedynamics.

ThefourthmodelispresentedbyKlineandRosenberg(1986) andisknownasfunctionalintegrationinnovationprocess,itis a logicalsequence,but notnecessarily continuousandlinear whereprocesses returnwhenever necessaryinearlier or later stage, canbedivided infunctionalseries withinterdependent andinteractivesteps.

Thepurposeofthismodelcomesclosetomeetingthe mar-ketneedsorconsumersatisfaction.Itprovidesareassessment of the importance of science and research in the innova-tion process, giving companies a central position in this process.

Thismodel,ontheotherhand,emphasizestheeffectsof feed-backbetweenthephasesofthelinearmodeldescribedabove, aswellasthenumerousinteractionsthateverystepofthe inno-vation process are established betweeninnovative companies andothercompanies(competitorsandsuppliers)orbetweenthe first andindustrial users,finalconsumers(VonHippel, 2007) andorganizationsoftheeducationsystemandthescientificand technologicalsystem.

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New need Research design and development New technology Prototype production Manufacturing Marketing and sales Market place Idea generation

State of the art in technology and production Needs of society and the marketplace

Fig.3.Couplinginnovationprocessmodel.

Source:RothwellandZegveld(1985).

Research and development

Technological and scientific knowledge available

Central chain of technological innovation Potential market Inventions and/or development of an analytical project Detailed project and testing New project and production Distribution and marketing

Fig.4.Thefunctionalintegrationinnovationprocessmodel.

Source:KlineandRosenberg(1986).

Itstartswithanideathatmaterializesrespondingtoa mar-ketneed,andthereis onepointthatfeedback information,if not,investigatesitself.Thereisacloseconnectionbetween sci-enceandtechnology,whichallowstheexchangeofexperiences, knowledgeandinformation,duringitsdevelopment,providing thenecessarycorrectionsineachstageandincreasingthe possi-bilityofseekinggoodresults.ForKlineandRosenberg(1986)to applytheknowledgeintheprocess,itgivesthemodelthelogic ofthechainingofideas.Fig.4illustratesthemodeldescribed.

Thismodelaimstopresenttheprocessofinnovationof com-panieswhosecapacityforinnovationresidesinthem.Theway howthisprocesstriggersandunfolds,however,isdifferent.In manycompanies,theincentiveforinnovationcomesfromthe existingneedsinthemarket,detectedbymarketingand distri-butionareas.

The fifth model is the systems integration and network-ing innovation process defined by Rothwell (1992) which

brings the idea that companies do not innovate an iso-lated way, but is inserted in a context of relations network system with other companies (directly or indirectly) with the infrastructure of public and private research (universi-tiesandresearchinstitutes)andthenational andinternational economy.

This model illustrated in Fig. 5 which is contrary to the models already presented, because they consider technologi-cal innovation as asetof steps(andthesesequentialor not). Thecentralpointofthismodelisinsidethecompanyfocusing ontherelationshipsbetweenelementsofthesystemasdrivers oftechnologicalinnovationprocesstoconsiderseveralfactors thathaveinfluenceintheprocess,suchasmacroeconomic con-ditions,market conditionsandcommunicationsinfrastructure, andconsiderimpactscausedbytheprocessinthecountry’s per-formance,aseconomicgrowth,jobcreationandcompetitiveness (Viotti&Macedo,2003).

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Training and educational system Macroeconomic and regulatory context Global innovation networks Regional systems Generation, dissemination and use of knowledge National innovation system Clustering Market factors Communication infrastructure Product market conditions

Performance of the country (growth, job creation, competitive edge)

Fig.5.Thesystemintegrationandnetworkinginnovationprocessmodel.

Source:ViottiandMacedo(2003).

Open innovation Other firm’s market Our new market Our current market External technology insourcing External technology base

Licence, spin out, divest Internal/external venture handling Internal technology base

Fig.6.Openinnovationmodel.

Source:Chesbrough(2003).

Fromthesystemicmodelofinnovationdescribedabove,are considereduniversities as oneof thepillars of the innovative process,whichconfirmsthedynamicsofthetriplehelix.Tothe extentthatknowledgebecomesanincreasinglyimportantinput forsocio-economicdevelopment,itisnaturalthattheuniversity whilstaninstitutionalspaceofgenerationandtransmissionof knowledge, isseenand analyzed as aprominent social actor (Loboscoetal.,2011).

The sixth and last generation, developed by Chesbrough (2003),isthe openinnovation model that meansachange in thetraditionalformatofinnovation.Chesbrough(2003,2006) showsthat thisopen formatmodelthat focusesontheuseof external expertiseto assist andaccelerate internalinnovation process,asshowninFig.6.

RahmanandRamos(2010)explainthatintermsofprocess, openinnovationcoversthemanagementandtheaccumulation ofideas,knowledge,licenses,intellectualproperty,patentsand inventions.Theauthorsaddthatintermsofinnovation,itcanbe considered user-innovation,marketing innovation,cumulative innovationanddistributedinnovation.Therefore,open innova-tiontheorycorrespondstoanumberofinnovativeapproaches whose basicelement ismade innovation beyondtheresearch anddevelopmentdepartmentsoftheorganization.

Inotherwords,openinnovationincorporatesjointeffortsof internalinitiativestotheorganizationandpossibleoutsourcing orcombinationofmultipleinputscomingfromtheexternal envi-ronmentduringtheprocessofdesignandproductdevelopment. Noticeably, yousee thetransition fromaclosedsystemof innovationtoopeninnovationsystem.Intheclosedsystem,the developmentoftheideararelygoesbeyondthewallsof com-panies;theseseektoobtaincompetitiveadvantages,especially from the internalcapabilities,andtheR&D prominent place. The opensystempresentsamodel thatnot onlyallowsother companiestointernalizetheknowledgeandnewtechnologies developed,creatingnewopportunitiesandnewchallenges,but alsovaluestheknowledge,experienceandexternalcreativityto thefirm,givingrisetonewbusinessmodels.

To sum itup, thesix generationsof the development pro-cessof innovationindicate thatlinked innovativeapproachto researchanddevelopment(R&D)ischangingandadaptingto thecontextofmajororganizationalchanges(Nobelius,2004). Weshowthatthesemodelsareanimportantsourceof compet-itiveadvantageforcompaniesbothlargeasmediumandsmall sized.

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Table2

SampleofSMEs.

NameofSMEs Economicactivity Numberofemployee Yearoffoundation Municipaldistrict

ProShock Theiroperationisassociatedtothecyclingindustryin

Brazil.Manufacturesbicyclesandwheelchairs.

38 1993 SãoJosédosCampos

TIQ Manufactureofchemicalproductsfortextileindustry. 55 1991 Tremembé

Troya Productionofaircraftstructuresandtools. 45 2005 SãoJosédosCampos

Alltec Developmentandmanufactureofproductsandhigh

performancestructuresincompositematerials.

200 1995 SãoJosédosCampos

Methodology

In ordertodevelopa robustworkand consistentwiththe researchneeds,weusedaqualitativeanddescriptiveapproach, basedonamultiplecasestudyaccordingtoEisenhardt(1989) recommendations.Thismethodologicalapproachwaschosento adequatelyservethe purposeofresearchthatisstudyinghow theinnovationprocessoccursinsmallandmedium technology-based enterprises located in Metropolitan Region of Paraíba ValleyandNorthCost–Brazil.

ThesampleofthisresearchispresentedinTable2.Thecases havebeenchosenintentionallybasedonthecontributionsthey could provide tothe study, inother words, the study sample was characterized as non-probabilistic theoretical and inten-tional.Thecompanieswereselectedaccordingtotheiractivities, size,yearoffoundationanddevelopedsomekindofinnovation. Currently,citieslocatedinMetropolitanRegionofParaíba Val-leyandNorthCost – Brazilarerecognizedfor their regional vocation linked tothe sectors: aerospace,instruments, motor vehicles, mechanicalmetal andfine chemicals. Thesesectors areclassifiedashighandmedium-hightechnologicalintensity accordingtotheOCDE(2011).

Thedatacollectionprocedurewasbasedonsemi-structured interviewsandindepthwiththetopmanagerswhoaredirectly linkedwiththeinnovationdevelopmentprocess.Theinterviews lastedonanaveragedurationofonehourandforty-fiveminutes. Tobuildtheguidelinesfortheinterviewswasusedasthebasis hemodelofvaluechainofinnovationdevelopedbyHansenand Birkinshaw(2007).Themodelofthevaluechainofinnovation, proposedbytheauthors,istoanalyzeinnovationasanintegrated process,fromgenerationofconcepttothediffusionof innova-tionamongotherareasoftheorganization.Table3showsthe divisionofvaluechaininthreephasesandpriorities.

The dataanalysis procedurewas based onintra and cross casemodelsetupbyMilesandHuberman(1994).Thisanalysis aimstodescribe,understand,explainandcrosstheconceptual content,processesandoutcomesofaparticularphenomenonin

acontextofmultiplecasesandhencedevelopamoredetailed understandingofallcasesinthe sample(Miles&Huberman, 1994).

Complementingtheanalysisprocedurealsousedtwo sense-makingtechniques: visualmapping andnarrative.Hence, the narrativestrategyaimstoprovidestories,meaningsand mech-anisms,whilethevisualmappingassistsinformingpatternsby graphicalrepresentations(Langley,1999).

Analysisofresults

This chapter presents the analysis intra and cross caseof fourcompaniesoftheresearchsample.Intheanalysis,theyare depictedthemainelementsthathelpedtoanswertheresearch question,whichisfocusedongeneratingnewknowledgeabout theprocessofdevelopmentofinnovationinsmallandmedium technology-basedenterprises.

Intracaseanalyzes:PROSHOCK

ProShockisacompanyfoundedin1993andlocatedinSão JosédosCampos(SP).Itsfoundersusedthewideexperienceto createbicyclessuspensions.Initially,thecompanywasfocused on the manufacture of bicyclessuspensions, as asupplier of Caloi.Tostudyandobservethemarketbegantodevotehimself tothe manufactureof products withhigher addedvalue,and frominternalresearchthecompanydevelopednewproductsin differentmarkets.Itwasnotedthatthecompanyhadthecapacity andknow-howtooperateinthemanufacturinghandbikesand wheelchairs, emerginganewproductbrand(Vemex)focused on assistive technology. The company’sinnovation model in questionisshowninFig.7.

Byanalyzing,themodelofinnovationofProShockobserved thestepofgeneratingofideas.Eachprojectisdefinedin accor-dancewiththefocustobedeveloped,forexample,development ofanewproduct;improvementoftheperformanceofa prod-uctalreadyavailableforsale;andqualityimprovementproject.

Table3

Stagesofvaluechainofinnovation.

Generationofidea Conversion Diffusion

Creationofideawithinaunit. Collaboration

betweenunits

Collaboration

withactorsfrom

outsidethe company Selection, screeningand initialfunding Developmentand movementofthe

ideaforafirst

result

Propagationand

dissemination

throughoutthe

organization

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Internal research

Generation of idea

Needs market and demands market Market observation Physiotherapy departamenta & rehabilitation sensory motor engineering laboratory Suppliers UNIVAP Research and development (R&D) Prototype/Tests Patent/model of utility Production SENAI: partnership in training Marketing

After sale _{Colletcion of information} related to products FINEP

SENAI

UNIFEI

Cycling club of são josé dos campos Information of customers and users Link of generation of idea Link of conversion of idea Link of diffusion of idea

Fig.7.InnovationmodeladoptedbyProShock.

Thedefinitions aremade frominformationderivedfrom cus-tomers,marketanalysisandinternalresearchdevelopment.The company’seffortshaverecentlyfocusedonthedevelopmentof internalprojects,whicharedesignedbytheengineeringteam.

Alotofinformationthatfeedthestepofgeneratingofideas arecollectedduringthepost-sale,whichprovidesinformation for improvement and changes in products in the customer’s vision. The projects of new products are balanced with the competitivestrategyofthecompany.

The conversionphaseof ideas isseenas the development processofproducts,whichincludesfromtheselectionand pri-oritizationofideasuntilitscommercialization.Theengineering departmentdiscussesthetechnologicalrequisitesandchecksthe feasibilityoftheprojectdevelopment,inadditionto consider-ingthedevelopmentgoals,the applicationcharacteristics,the responsibilitiesofeacharea,andproductionparametersofeach manufacturingarea.

At this stage, the conversion of ideas is signed coopera-tion networksandinformation networksfor the development ofprojects,inadditiontofundingforitsimplementation.There arealsoapartnershipwithCyclingClubofSãoJosédos Cam-posandtheUniversityofValedoParaíba(UNIVAP),through thePhysiotherapyDepartment&RehabilitationSensoryMotor EngineeringLaboratory(LERSM),todevelopproductsfocused on the market directedat para-cycling athletesin handcycle category.

Thedevelopmentofassistivetechnologyarisesfromaproject ofdevelopingawheelchairwithdampingandelectroniccontrol system. Thisprojectwassupportedfinancially whenreceived approvalinthepubliccallofeconomicsubsidytoinnovation in2008theFundingAuthorityforStudiesandProjects(in Por-tuguese:FinanciadoradeEstudoseProjetos–FINEP1).

After two years of the beginning was presented the first workingprototypeofthewheelchairsuspension.Theprototype was testedinthelaboratory withfatigue testaccordingtothe standardABNTNBR7176–WHEELCHAIRS,andfieldfor twowheelchairusers.

Basedontheobtainedfindings,thecompanysigneda part-nershipwithSENAI inSãoPauloInnovationProgram,andin 2011startedthedevelopmentofthesecondphaseoftheproject: theprototypeoftheimprovementtothedesignofavehiclethat includesalltheaboverequirements.

Inthiscontextofinnovativeideas,projectwithfinancial sup-portfromFINEP,partnershipwithSENAI,andfindingsreported inpracticebythetechnicalstaffofthecompanywiththe mon-itoring,providinginformationanddirectfeedbackfromusers’ wheelchairpartnersarosethewheelchair.Afterthedevelopment andapprovalofprototypesbeganproductioninpartnershipwith

1_Funding_Authority_for_Studies_and_Projects_is_an_organization_of_the_Brazilian

federalgovernmentundertheMinistryofScienceofTechnology,devotedto

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SENAI,whichannuallyreservevacanciesforcompany employ-eesintrainingcourses.

Marketingisdoneatsiteandspecialtyshops,andastrong presence on social networks draws attention. The after-sales phase begins immediately after the time of acquisition of the product. With a focus on collection of informationfrom customersfor maintenanceof post-purchase relationship and customersatisfactionandthereforetheprocessofgeneratingof ideasisfeedback.

HansenandBirkinshaw(2007)highlighttheroleof commu-nicationatany stageof the process.In thecaseof ProShock observedtheintenseinternalandexternalinformationflow.It isobservedthatthe ProShocknotinnovatesaloneandhaving an innovation model similar toCoupling Innovation Process Model.Itisinsertedintoanetworkingrelationshipwith universi-ties(UNIFEI,UNIVAP),technicalschools(SENAI),suppliers, cyclingclubinthecityofSãoJosédosCampos(SP)andgeneral users.

Intheconstructionofthismodelfindsthesharingof infor-mationthroughouttheprocess.Therelationshipsthatintegrate thismodelarebuiltinordertomeetmarketneedsandconsumer satisfaction.

Attentionshouldbepaidtotheeffectsoffeedbackbetween thestagesofdevelopmentandinteractionspresentineachstage oftheprocess,becausetheyallowtheinclusionofinformation andadjustmentsrequiredinadditiontotheconstantdevelopment ofknowledge.

Intracaseanalyzes:TremembéIndústriasQuímicas (TIQ)

TIQwasfoundedin1991inthecityofTremembé,andits performanceisdomesticandoperatesinthechemicalsegment withspecialtiesdevelopedmainlyfortextileindustryandalso participatesinthesugarandethanolindustryandwaterandpaper treatment,developing,continuouslyofteninpartnershipwithits customers,newproductsthatrespondtorapidchangesinthese sectors.

Basedoninterviewswiththemanagers responsibleforthe developmentof productsandprocessesofTIQwaspresented graphicallyamodelofinnovationdevelopment,showninFig.8. Fortheconstructionofthemodelbegantheanalysisbythe stageofgeneratingofideas,whichisfedbymarketneeds,which arecapturedbyateamofemployeesthatistheDepartmentof Applications.

This department is composed of professionals and board members,andisdesignedtocontrolinformationthatentersand leavesthe company. Thereisa feedbackandtraffic informa-tion.Aroundtwoyearsago,thegenerationofideasisalsofed byreplacementofproducts,whichforlegalandenvironmental issuesarerequiredtobereplaced.

Withtheapprovalofthedirectors,theideaisorisnot con-tinuityinthedevelopmentprocess,afterwardgoestoresearch anddevelopmentinwhichistestedanddefinedtheparameters requiredforacompletespecification.Thedepartment applica-tionsarepresentbothatthestageofgeneratingofideasasthe

conversionofideasphase.TheR&Dlaboratoryisresponsible forthedevelopmentofparametersandproductivemeans.

Researchanddevelopmentdoesnothavemanypartnersfor cooperation,forexample,thereisonlyacloserelationshipwith suppliersandthisthankstothepersonaleffortsoftheteam,and aproximitytotheLorenacampusofUniversityofSãoPauloin involvingtheliteratureusedirectedtheimplementationof the company,actingasasourceofinformation.

TheteamofR&Daimsatcreatenewproducts,developing formulations(laboratoryscale)andapplyingthemeansof pro-duction(large-scaleproduction).TheTIQmaintainsaminimum numberofnewproductstobedeveloped(6–10),whichinthe wordsoftherespondentsiseasilyovercome.Regardingthe pro-ductionprocessthereisaninternalfocusonactionsthatfocus ongreaterefficiency,quality,andreductioninproductioncycle. Financial indicators that demonstrate process costs before andafterthechangecontinuouslyevaluatetheseactions:R&D not onlyengaged inthe development, butalso incontinuous improvementprocesses.Withregardtomarketing,TIQsought tocircumventthepresenceofadistributorandengagedinthe saletotheend-usercompanies,givingthenecessarytechnical support.

Thecompanyhasaninnovationmodelsimilartochain inter-actions. During the construction of this model notes to the internalsharingofinformationthroughouttheprocess.Attention shouldbepaidtotheeffectsoffeedbackbetweenthestagesof developmentandinteractionspresentineachstageoftheprocess becauseitallowstheinclusionofinformationandadjustments requiredinadditiontotheconstantdevelopmentofknowledge. Thismodelofoperationanddevelopmentofinnovationisstill underconstruction,anditsdevelopmentisoneofthegoalsof thecompanydirectors.

Intracaseanalyzes:TROYA

Thebeginningofthecompanytookplacein2003,and ini-tiallyparticipatingintheincubationprocessofIncubaero,2was founded by three engineers who were already active in the aerospacesegmentasEmbraerprofessionals.

The company is dedicated to the aeronautical market and specializesinthe processof aircraft structures.It hasagreat knowledge inthedrafting,design andmanufacturingof tool-ing, but has developed projects for wind energy (design for Tecsis Company) and automotiveindustries, according to its know-how. Currently 90% of its activitiesare devotedto the aeronauticalmarket.

BasedoninterviewswiththeTroya’stopmanagementdrew up graphically the innovation development model, shown in Fig.9.

Theinputofinformationinthegenerationofideasisgiven by customerneeds, whichare captured and transformed into

2 _Incubaero_is_a_business_incubator_and_projects_created_by_Casimiro

Mon-tenegroFilho Foundation todevelop theaerospaceindustry, in partnership

withtheGeneralCommandofAerospaceTechnology/TechnologicalInstitute

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Substitutions for suitable products

Needs market and demands market Market observation Generation of idea Department of applications Research and development (R&D) Prototype/tests Production

Marketing Link of diffusion of

idea Link of conversion of

idea Link of generation of idea

Suppliers Basic research (USP – LORENA) Belgian company

Fig.8.InnovationmodeladoptedbyTIQ.

Needs market and demands market

Generation of idea

Customer Research and

development (R&D) -engineering Suppliers Link of generation of idea Link of conversion of idea Link of diffusion of idea

Standards of the aeronautical and defense industry Prototype/test/ structural analysis CTA Customer Budget Production Outsorcers Marketing Suppliers

National and international customers

Suppliers

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Internal research _{Needs market and} demands market

Funding institute for science, technology and innovation

Suppliers Research and development (R&D) Education institution Institute of science and technology Information of

customers and users _{Enterprises (Benchmarking)}

Link of diffusion of idea Link of conversion of idea Link of generation of idea Education institution Prototype/tests Patent/model of utility Production Marketing After sale Generation of idea

Fig.10.InnovationmodeladoptedbyAlltec.

solutionsfortheEngineeringDepartment,whichisresponsible forresearchanddevelopmentofideasandinvolvesuppliersif necessary.

Withtheendorsementofmanagersandaftercriticalanalysis theideahasorhasnotcontinuityinthedevelopmentprocess hencebeginsthe conversionofideaswiththe creationof the prototype,whichinitiallyconsistsincreating avirtualmodel modeled in CATIA software andstructural analysis by Nas-transoftware.Withthecustomer’sapproval,theapprovedpiece goestobudgetandproductiondepartment,andthentheproduct returnstotheprototypestageandphysicaltests.

The link diffusionof ideasstarts withthe production and involves suppliers and the need to outsource some stage of productionisevaluated.Thisphaseinvolvesnationaland inter-nationalstakeholders, located inChile, Canada,Portugaland Spain.

After production has the commercialization. The Troya operatesinthe domesticandinternationalmarket, serving,in Brazil,Embraer andallits suppliers,for example, Latecoere, Sobraer,andsmall enterprises. In the internationalmarket, it meetsthemediumandlargecompanies,as OgmainPortugal andAlestisSpain.

Inrelationtoproductionprocesses,theinternalfocusison actionsthathavereducedcosts,maintainingqualityandmeeting deadlines.Thecompanyevaluatesitsdevelopmentbyfinancial

indicatorsthat prioritizerevenues,inadditiontoindicatorsof Embraer’ssuppliers,seekingtosupplyindex98%.

During the interview, the top manager hasmade clearhis concernwiththetrainingofstaffwiththeintentionofpreparing them better toserve their customers, because inTroya view, qualityoftheworkforceensuresproductquality.

TheTroyapresentsafunctionalintegrationinnovation pro-cess model, whichhas internalandexternal feedback during the development process. Interactions should be highlighted becausethecompanyinteractswithrenownedinstitutions like ITAand CTA, andalso interactwith Embraer,whichhas an importantpositionintheglobalaeronauticalindustry.

Intracaseanalyzes:Allteccomposities

Two formeremployees of EMBRAER foundedthe Alltec Companyin1995 inSão JosédosCampos andhas its activ-itiesfocused onthe manufactureof componentsincomposite materialsapplicabletotheaeronautical,aerospaceanddefense industry.In2013,receivedofEmbraertheawardforbest sup-plieroftheyearinthecategoryCompoundsTechnology.

Based on interviews with top managers of Alltec, we presented graphically in Fig. 10, the model of development of innovation. The interview was conducted with two top

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managers,andtopreparetheconstructionofthemodelbegan byobservingtheideagenerationstage.

Theinputinformationinthegenerationofideasisgivenby customerneeds.Duringtheinterview,therepresentativesofthe innovationprocessmakeitclearthatthecompanyisfocusedon tomeettheseneeds.

In theEngineeringDepartmentofthe needsareidentified, categorized,andformulatespossiblesolutions.Duringthisstage of development are involved suppliers and renowned educa-tionalinstitutions(ITA,UNIFESP,UFABC,UNITAU,FEG)and research(IPTandCTA).ArelevantpointintheAlltecmodel isthenetworkofrelationships thatisformedbythecompany inallphases:aremanyhighereducationinstitutions,research institutes,andcompaniesandpartnerlaboratories.

Linkofconversionofideasisprimarilyengagedinthe con-struction of prototypes andcarryingout testsfor approvalof materialastoitsconstitution,andphysicochemicalproperties as to its application. At this stage they are involved partner laboratoriesandeducationalandresearchinstitutions.

Linkofdiffusionofideabeginswiththeproduction,which isdirectlyinvolvedintheinnovationprocess,becauseitisthe feedbackforcontinuousimprovementactionsandreductionof lead-time,amongothers.Afterproductionhasthe commercial-ization,thatservingEmbraerinBrazil.Thecompanyhaslittle internationalpresence,andevaluatesitsdevelopmentthrough financialmeasuresthatprioritizerevenues.

TheAlltecpresentsaninnovationmodelsimilartofunctional integrationinnovation processmodel, whichhas internaland externalfeedbackduringthedevelopmentprocess.Interactions signedworthmentioning,becauseitisawell-developedfocused onmeetingcustomerneeds.

Crosscaseanalyzes

Companies present the phase of generating of ideas, their conversionintoresults,productdevelopment,untilmarketing, supportedintheirdailypractices.Itisnotaconsciouslyadopted andsystemicmodel,withawell-definedgoal.

The theory developed by Hansen and Birkinshaw (2007) decomposesthephaseofgenerationofideainthreesteps:(a) collaborationwithintheunit;(b) collaborationbetweenunits; and(c)collaborationwithexternalparties.Thecompanies stud-iedhaveonlyoneunit,andthischaracteristiccannotverifythe collaborationbetweenunits.

Table4shows thecomparisonbetweenthesurveyed com-panies in the process of generating ideas, whose priority is thecollaborationwithintheunitandwithexternalparties.The companies’presentcooperationwithintheir units,butthebig differencebetweenthemishowtheydothiscollaboration.

In Proshock, collaboration occurs mainly by responsible between R & D, represented by the Engineering and Proto-typesandTestsDepartment.Thereareastrongafter-salesteam’s activitieswithrespectthe collectionofinformationontraded products,thusfeedingtheprocessofgeneratingofideas.

In other companies, TIQ, Troya and Alltec, internal collaboration involvesthe sectors responsible for R&D, Pro-totypingandTesting,ProductionandSalesDepartment.Inall

companies surveyed, thereare involved inall areas, bemore director indirectway.Inall,thereisaconcernofdeveloping an enabling environmentfor innovation.Thisconcern canbe demonstratedbyinvestmentsinemployeetraining.

Withregardtocollaborationwithexternalparties,the cooper-ationrelationsbetweencompaniesandotherinstitutionsplaya significantrolewithregardtolearning,disseminationof knowl-edge,innovativecapacity,andthereforecompetitiveness.

Cooperationbetweencompaniesseekstomeetcertainneeds that wouldhardly besatisfiedactingindividually,theneedto combine skillsanduse know-how of other companies; share theburdenforcarryingouttechnologicalresearch,development andsharingtheknowledgegained;offerhigherqualityproducts andmorediversifiedlines;increasethecompetitivestrengthof actionformarketofexternalinsertion;strengthenthepurchasing power;shareresources,especiallythoseunderutilized;andshare risksandcoststogeneratenewopportunities.

Itisnoteworthythatthecompaniessurveyedhavesome rela-tionship withexternal sources.Some present thispointmore clearlyandwithgreaterintensity,likeProShockandTroyawhile theTIQpresentsinitialwaybutwiththeintentionofexpansion. Table5showsthephaseofconversionofidea;itevaluates itspriorities,andcomparesthecompanies.Atthestageof con-version(selection,prioritizationandfundingideas),companies arefoundstructuredbyaligningitsactivitieswithitsstrategic needs.

TheProShock,TIQandTroyaareremarkableforastructure thatusesmultidisciplinaryteamsandahighstandardizationof processes. OnlyProShock andTroya redefineits competitive strategy,operatinganddevelopingitsknow-howinthe develop-mentofnewproductsandactivitiesinothermarkets.

In the conversion of idea can find a common barrier to all companies, which is the funding of ideas. To strengthen this stage is necessary to encourage the use of government funds inaddition tothe use of special credit lines for small business.

Ofthe companiessurveyed,the ProShockandAlltechave projects funded by FINEP. The Troya signalled interest in the economic subsidy of its projects, butdid not finalize the paperwork for public notices and does not haveexpected to doit.

Ofthecompaniessurveyed,theProShockpresented result-ingpatentsofitsdevelopment,andatotaltherearesix patent applications.AlreadytheTIQandTroyadidnothavethis con-cern.Table6showsthecomparisonofcompaniesinthephase ofdiffusionofideas.

Inthisphaseofdiffusionofideas,disseminationinthe orga-nizationandinthemarket,ProShockandTroyadevelopednew businessmodelsfromdevelopedproducts,althoughTroyahas preferred tokeepinthe aeronauticalmarket fortraditionand stability ofrelations providingthe business.TheTIQoffersa widerangeofproductsandservicesandoperatesinoutsourcing servicestoothercompanies.

Regardingthedisseminationoftheprojectandofnew knowl-edgeisanecessaryroutinefollowedbyallcompanies,especially tofulfilltherequirementsof regulatorystandards andalsoby customerparticipationintheinnovationprocess.

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Table4

Comparisonofphaseofgenerationofideas.

Phase Priorities ProShock TIQ Troya Alltec

GenerationofIdea Collaboration_within_the_unit Internal_made_betweencollaboration_the_sectors,is

especiallyamongthose

responsibleforR&D

(Engineering),

Prototypes,andtests.The

aftersaleactsfeedingthe

processwithideas

collectedwithcustomers

andusers.

Searchthecollaboration

betweenallsectors

involvedwithprocesses

andproducts,suchas

R&D,productionorsales.

Thereiscollaboration

betweentheEngineering

responsibleforR&D

(Engineering),and

PrototypesandTesting

andProduction.

Thecollaborationtakes

placebetweenallsectors

involvedwithprocesses

andproducts,suchas

R&D,Production.

Collaborationwith

externalparties

Thereisexternal

collaboration(customers,

users,universitiesand

others).Itissigned

cooperationnetworksand

information.

Thereisthestartofan

externalcollaboration

withrespecttobasic

research(USP-Lorena),

andthereisinterestin

expandingthese

networks.

Thereareexternal

collaboration(Customers,

users,CTA,nationaland

internationalcompanies

andothers),andare

signedcooperation

networksandinformation.

Thereisexternal

collaboration(customers,

users,universities,

instituteofscienceand

technologyandothers),

andaresigned

cooperationnetworksand

information.

Table5

Comparisonofphaseofconversionofidea.

ConversionofIdea Evaluation_Funding and The_are_balancednewproduct_withdesigns_the

competitivestrategyof

thecompany.Thereare

developmentprojects

witheconomicsubsidies

(FINEP).

Theprojectsare

developedwithown

resources,workingwithin

thechemicalsegmentfor

thetextileindustry,which

provedtobeverywide.

Thenewproductdesigns

arebalancedwiththe

company’s

competitivenessstrategy,

workinginproduct

developmentinother

sectors,ifitsmarketto

showlazy(automotive,

energy).

Thenewproductdesigns

arebalancedwiththe

competitivestrategyof

thecompany.Thereare

developmentprojects

witheconomicssubsidies

(FINEP).

Developmentof

ideasinto

products,services

ornewbusiness

Thecompanyisdedicated

tothemanufactureof

productswithhigher

addedvalue,conduction

internalresearch.

Developednewproducts

indifferentmarkets.

Itidentifiedthecapacity

andknow-howtobe

makinghandbikesand

wheelchairs.Appeareda

newbrandofproducts

(Vemex)focusedon

assistivetechnology.

tothechemicalsegment

inthetextilemarket,but

itsR&Dteamworkson

severalfronts,ranging

fromthecreationofnew

products,adequacydueto

legislationchanges, continuousimprovement; developmentprocesses; andoutsourcing manufacturingtothe othermarkets.

especiallytothe

aerospaceindustryand

mayrealignits

competitivestrategy,if

necessary.Theactivities

areglobal.Thefocusof

developmentisthe

attentiontocustomer

needs.

especiallytothe

aerospaceindustryand

canaligntheir

competitivestrategy,if

necessary.Thefocusof

developmentisthe

attentiontocustomer

needs.

Table6

Comparisonofphaseofdiffusionofidea.

DiffusionofIdea Disseminateand

applytheideasinside

andoutsidethe

organization Itisinsertedintoa relationshipwith universitiesnetworking (UNIFEI,UNIVAP), technicalschools (SENAI),suppliers,

cyclingclublocatedin

SãoJosédosCampos–

Brazilandusersin

general.

Thecompany’sfocusis

ontheinternal

developmentofits

processes,andthe

creationofnewproducts.

Thecompanybelongsto

animportantregional

context,relatingto

variousexternalactors.

Itsfocusisthe

developmentofsolutions

fortheaeronautical

industry,butbecauseof

itsknow-howhasworked

onotherfrontswhile

needed.

Thecompanybelongsto

animportantregional

context,relatingto

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Discussionandconclusion

Innovation is a widespread issue, particularly with regard tocompetitivenessandtool for businesssurvival,sincebeing able to do something that no one else can, and do it bet-ter than the other. This represents a significant competitive advantage.

Thecentralobjective of thispaperwastounderstandhow theinnovationprocessoccursinsmallorganizations.Withthe results,weconcludethatsmallenterprisesdonotinnovatealone, becausetheyhaveanestablished contactnetworkthat havea strongconnectionwiththeactivitiesdevelopedbythecompanies surveyed.Despitealltheobstacles,thereistherelationshipwith universities,technicalschoolsintheregionandothercompanies, bothlargeandsmallandmedium-sized.

Thedevelopmentofinnovationisstronglyinfluencedamong otherthingsbyindustrysectorandbythesizeofthecompany (Conde &Araújo-Jorge, 2003).It is possible toobserve that thecompaniesoftheaeronauticalindustry,thedevelopmentof innovationmainlygivesbecauseofthecustomerrequirements, whileinothersectors seekstomeetnewmarketsasawayof survival.

Innovation is driven by the ability to establish relation-ships,opportunitydetectionandtakeadvantageofthem(Tidd, Bessant,&Pavitt,2008),andthiswasobservedinfour com-paniessurveyed.Innovationprocessesofcompaniesareusually supportedbytheirrelationshipswithothercompaniesand orga-nizations. Relations of competition and conflict or trust and partnershipondifferentlevelscanrepresentthesewaysof inter-actionoflocalactorswithexternalactors.

The authors also argue that the type of interaction also requiresinformationonthenumberandtypesofactorsinvolved; motivationsandobjectives; frequency;intensity andduration; problems and difficulties of the interactions (Cassiolato & Lastres,2005).

Through analysis, we can see that companies provide to theaeronautical anddefenseindustryhaveas astartingpoint thecompliancewiththerequirementsspecifiedbycustomers. Every processis unleashedbefore the customerneeds,while companiessellingproductsthemselvesareconcernedtocollect informationonthemarket.

Companieslinkedtodefenseandaeronauticalform partner-ships, especiallytherequirement of theregion’s industryand geographic proximity toCTA, ITA, and Army aviation.The othercompanieshavetheirstartingpointbothinternalresearch, andtheobservedneedsinthemarket.

These companies have more difficult in its activities and development of products and processes. Such difficulty is because theyare not within anactivity that characterizesthe region,henceitismoredifficulttoestablishpartnershipsand developtechnologies.

Hansen andBirkinshaw (2007)emphasize the importance oftheroleofcommunicationatanystageofthisprocess, con-firmingtheideathatinnovationdoesnothappeninisolation.The largerthenetworkofrelationshipsofSMEswillbethelargest development achieved (Cross, Hargadon, Parise, & Thomas, 2007).

Ideas emergeandturn aproject in developmentwhen the various opinions are integrated, but they often arise from unstructuredwayorobservationofmarketneeds.Evenif unin-tentionally,companiesbuildexternalnetworksofrelationships andinvolvetheiremployeesinmultidisciplinarygroups.

Other factorthatit isequallyimportant isthe institutional environment,whichthesecompaniesoperate,becauseitaffects the innovation (Albagli& Maciel, 2004). If thereis no inte-gration between the technical,marketing, R&D,and others involvedintheinnovationprocess,thegroupspromoted inter-nallywillgeneratemanyideasthatwillbeevaluatedinisolation afteralongprocess,insteadofbeingimmediatelyvetoedearlier. Hamel(1999)showshow themodelsof temporary partici-pationinprojectscancontributetotheexchangeofknowledge andgenerationofideas,andtoCrossetal.(2007)innovations arecreatedthroughnetworksandgroupsofpersonswhowork harmoniously.

Thisstatementwasproveninthenumbersofgeneratedideas andprojects incompaniesandhowemployeeparticipationis active mainlyinthestagesof generationanddevelopmentof ideas. Anotherimportantpointconcernstheiterationbetween stagesofthemodel.ThistopicwasnotaddressedinHansenand Birkinshaw’sarticle(2007),butitwasfoundinthestudythat thediffusionphasecanfeedbackintotheproductdevelopment phase.

Innovation insmallandmediumtechnology-based compa-niesoccursinaveryparticularwayandadaptsaccordingtothe characteristicsanditsleadersofcompany’sown.The relation-shipsestablishedinthisprocessdifferandthoseestablishedin largecompaniesanditisnecessarytounderstandthem,since theirimportanceismainlyrecognizedwithregardto socioeco-nomicbenefitsbroughttotheregion.

The Metropolitan Regionof the ParaíbaValley andNorth Coast–Brazilpresentsseveralinteractionpossibilities,suchas thesignificantnumberofpublicresearchorganizations, technol-ogy mediationorganizations,incubators,politicalinstitutions, regionaldevelopmentagencies,andeducationalorganizations, aswellasalargenumberofcompanies.

Briefly,weconcludedthatthesmallandmedium technology-based companies not innovate in a systematic way, but an intuitivewayandfocusedontheideasofitsfounders. Innova-tionisdevelopedmainlyfocusedonmeetingtherequirements ofcustomersandmarketneeds.Theformationofpartnerships is primarilybymarket requirementsor developmentof prod-ucts andprocesses, butisviewed withfearby managersand entrepreneur.

Thesmallandmediumtechnology-basedcompaniesproved highlyadaptableandflexibleintheirmanagementpracticesand innovation,eventhoughithasfewresourcestoinvestinR&D. Ontheotherhand,theseorganizationsusethevariouspositive aspectsthathavetolaunchinnovationsthatdonotrequirelarge financial expenditure, especiallyininnovatingtheir processes andproducts,andseekingalternativewaystolaunchinnovations thatincreasetheircompetitiveperformance.

The contributionsof thispaper werebothinthe academic contextandinthecorporate.Intheacademiccontext,thestudy has contributed toadvances inresearch carried out in Brazil

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intheinnovationfieldofknowledge.Thusdevelopedthe sys-tematization of an analysis model, which contributed to the betterunderstandingofhowoccurstheprocessofinnovationin smallandmediumtechnology-basedcompanies.Inthe corpo-ratecontext,themodelspresentedwillcontributetoimproving the innovation management analyzed companies, helping to maximizeresults.

Finally,althoughithasbeenachievedtheobjectiveproposed inthispaper,thesurveyhaslimitations.Alimitingfactorwas theaccessibilityofcompanyinformationwasrestrictedbecause sometop managers didnot feel comfortable to disclosedata treatedasconfidential,mainlyrelatedtostrategyandfinancial issues. Another limitation was the small numberof selected cases,withinformationthatreflect,forthemostpart,thepoint ofviewofthetopmanagers.

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