Innovation Strategies of Small Russian Firms

This study analyzes the different types of the innovation behavior of small firms. At the first stage, the analysis of behavioral distinctions between small firms and medium-sized companies as well as large enterprises is undertaken. Particularly, small firms' contribution to innovation activities of the country is considered. It is demonstrated that small businesses tend to a higher degree to create new-to-market innovations. By comparison, medium-sized companies and notably large enterprises focus on spreading innovations already known in the markets. In addition, the study researches the use of different-sized companies the various innovation types including but not limited to open innovations. It is also shown that small Russian firms tend to process innovations. Besides, the considerable part of small firms' innovations is created by others, while medium-sized companies give precedence to their own developments and large enterprises are intensively involved in cooperation processes. At the second stage, the paper analyzes the strategies of small businesses depending on their size-class. As a result, it is established that the tendency of innovation diffusion growth remains for small firms with the increase in size. In spite of significant marketable novelty, the lowest shares of innovative products sales in turnover in micro businesses are observed. Diffusion is further increasing along with the size growth. Research and development costs and costs to buy machinery and equipment connected with innovations prevail in the cost structure of innovations. High expenditures for production design pertain only to some groups of small firms, though. The main sources of innovation finance are equity capital, public funds, loans and credit lines. However, concessional lending is an essential factor only for the smallest firms.