Are small-sized firms really innovative? Understanding the Indian scenario

This article presents an understanding of innovation in the Indian context by considering the relationship between firm size and innovation. This is based on a major study on innovation where survey of Indian firms was undertaken by the research team to understand the process in the Indian context. In this article the focus is on the relationship between firm size and propensity to innovate. The interesting observation is that the small-sized firms focus mostly on minor or marginal innovations which are either not recognized or go unnoticed in the market. The purpose behind such initiatives is to enable them to sustain in the market. This brings in an interesting dimension of the process of innovation where the firms innovate not to create market, but to sustain themselves in the market. The article presents variation in the innovation activities amongst the firms depending upon their size.