ABSTRACT
Small and medium enterprises (SMEs) in emerging economies tend not to use technological innovation as a competitive strategy, but rather use it passively to assimilate technology as embedded in capital goods. However, as these economies become increasingly subject to international competitive pressures, the need for improving technological capabilities increases in many sectors, while many conditions in the economic environment are still not conducive to the development of technological capabilities in small firms.
We present here results from a study that uses a database of approximately 400 SMEs in Mexico, and a set of 35 in-depth interviews dealing with the ways in which entrepreneurs and owner-managers perceive the need for greater technological capabilities, and the process through which they develop those capabilities. Results helped us identify some of the key managerial and entrepreneurial characteristics associated with the development of technological innovation capabilities in the firm. We also identified characteristics in the business environment that constrain or enhance their chances of success in this endeavor, 273and discuss policy implications for regional and federal programs that aim to support SMEs.
