PRODUCTION INNOVATION IN MANUFACTURING FIRMS: THE CASE OF SWEDISH SMES

The manufacturing industry needs to meet the challenges of a rapidly changing society by using innovation while considering other factors such as trends. This paper focuses on three overarching trends: globalization, urbanization, and digitalization. These three major trends together with policies and regulations could be regarded as fierce threats to a manufacturing firm operating in a traditional mature industry. However, this mix could also be viewed as an opportunity for the innovative company to address future market needs and gain competitive advantage. Thus, the aim of this paper is to investigate the production innovation in SMEs by considering the developments in the manufacturing processes as well as the innovation and design process activities of the manufacturing company. Through two case studies in Sweden, this paper seeks to answer how do SMEs operating within the manufacturing sector respond to the sustainability and other emerging trends while innovating in their production processes. This paper helps to understand how these firms are using some of the approaches and strategies to keep the current pace of innovation and sustainability trends.