The purpose of this study of small firms is to compare the process of internationalization in traditional manufacturing companies with cor­ responding processes in companies oriented toward innovation. Case studies were conducted in six small Nordic companies: three conven­ tional and three innovative. The underlying concept of the conven­ tional companies is strictly production oriented. Investment in engineering workshops and an effective organization for production constitute their most important strategy. In the innovative companies the production equipment is relatively easy to move, and over the years these companies have changed the location of their production plants a number of times. The basic meaning of technology also differs in the two categories of industry. The conventional companies are based on an established technology that can be purchased through well-known market channels. In the innovative companies the process of de­ veloping new products or serving as an intermediary between research organizations and end users demands close contact with people and organizations close to the technological core of the industry.