Entrepreneurial Orientation, Technological Capability, Environmental Dynamism and Innovative Capacity Within Manufacturing Smes- a Critical Review of Literature

Abstract

Innovation has been acknowledged to be a key driver for growth in business firms. An area that has not been well researched is the antecedents of innovativeness. Existing research has documented Entrepreneurial Orientation as the main reason that firms have a tendency to innovate. In addition to this, it has been ascertained that the body of knowledge on the concept of entrepreneurial orientation is growing and as such there is a need to understand the contributory factors to the dimensions of this concept. Existing literature has shown that there are internal as well as external factors that affect innovativeness. In addition to this, there is a need to have investigations that apply universally and thus the need to study this phenomena in manufacturing SMEs. The study reviews the theories of innovation as well as the role and impact of the key variables of technological capability and environmental dynamism. In additional to the theoretical concepts that have been identified, the study also reviews the empirical studies in this area that have been carried out with a view of identifying the gaps in this area. A summary of knowledge gaps is listed. On the basis of the knowledge gaps identified, there is a compelling need to develop this area further and as such a conceptual framework is developed for further study.