The Relationship between Market Orientation and Innovation Capability-an Empirical Study on the SMEs of Zhejiang Province

Innovation capability is quickly becoming a crucial factor in enterprise management as a result of the rapidly changing environment and aggravation of market competition. FPI has always been carrying out market-oriented philosophy, and innovative activities in accordance with the market conditions. In the short time of six year, innovation capability of FPI has been accumulated and largely improved, so, FPI got very good performance. Market orientation has a positive influence on innovation capability in the SMEs. Based on the literature review and enterprise surveying, the study constructs the relationship model between market orientation and innovation capability. We define market orientation by five dimensions: information acquisition, information sharing, demand response, marketing system and long-term perspective. The study finds information sharing, demand response, marketing system and long-term perspective all have positive impact on the innovation capability, based on the data of 367 SMEs in Zhejiang Province. The influence of information sharing is the biggest, but information acquisition has no positive impact on innovation capability. The moderate effect of environment factors (Technological turbulence, market turbulence and competition circumstance) and culture factors (the degree of supporting innovation by top management, the culture of high involvement innovation) are studied in this paper What's more, the significant effect is revealed in the end.