ABSTRACT
Innovation plays a key role in firm performance and therefore it is a critical factor for the national economy in each country. Successful management of innovation in small and medium size enterprises (SMEs) is then of paramount importance. Traditionally informal methods and practices have been used and high failure rates had to be accepted. Recent trends and developments like globalization, the need for a sustainable physical environment, and digital technologies, together with new innovation paradigms like open and disruptive innovation, have increased the challenges for innovation management in SMEs. The current chapter using the theoretical lenses of the resource/capabilities-based view and the systems theory and focusing on the key construct of innovation capacity, critically assesses and integrates the various literature streams. The integrative review leads to a proposed innovation management framework that could guide further research and offer a valuable practical and actionable guide for managers and public policy makers.
