DETERMINANTS OF INNOVATION IN SMALL AND MEDIUM ENTERPRISES

This paper investigates the determinants of innovation in small and medium enterprises (SMEs) in the Czech Republic. The country that has undergone painful economic transformation and institutional change leading to the establishment of the new standards of entrepreneurship is now dealing with the aftermath of world's economic crisis. Czech SMEs strive to survive in the tough competition on domestic and EU markets and innovations might become one of the ways how to differentiate their product and outrun the competition. Our case study is based on the survey questionnaire with 1144 Czech SMEs. We find several significant determinants for innovation: own R&D, investment into technology, improvement of quality of a product or service, or presence on foreign (EU and world) markets. Moreover, bureaucratic barriers for innovations and external factors with negative impact did not come through as significant obstacles for innovative activities in SMEs.