6533b7d7fe1ef96bd1268327

RESEARCH PRODUCT

Innovation activity of SMEs in different locations

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Todtling and Trippl (2005) argue that innovation activity is a key element in regional economic development (see also Ronde and Hussler, 2005; Audretsch and Lehmann, 2005; Cooke, 2005). However, we know little about the formation, development and diffusion of innovations in different milieux. The aim of this study is to clarify the factors – in particular, the regional factors – that affect the innovation activity of small and medium-sized enterprises (SMEs). Our analyses of the innovation activity of Finnish SMEs revealed that innovation activity is very brisk in towns and relatively brisk in rural areas, although the difference between the two was not statistically significant. A logistic regression analysis provided support for the assumption that there is more innovation activity in small towns than in sparsely populated areas. The logistic regression analysis indicated the observed differences in innovation activity among SMEs are primarily due to differences in the companies’ rates of growth, networ...