**1. Introduction**

According to the 2019 economic censuses in Mexico, conducted by the National Institute of Statistics and Geography (INEGI), there are 4,800,157 economic units in the country dedicated to services, commerce, and manufacturing; of this total, 99.8% are micro, small, and medium-sized enterprises<sup>1</sup> (MSMEs) [1]. The relevance of MSMEs can be seen from different perspectives: for their sizable contribution to the total number of companies in the country, their substantial contribution to the gross domestic product (GDP) and national value added, their high capacity to provide employment to the productive population, and their social impact by allowing the formation of social fabric in the communities where they operate, among others.

The censuses also revealed that in 2018, the manufacturing sector was the most important in terms of total gross production in Mexico, with 48.2% of the national total [1]. Mexico has a total of 579,828 manufacturing companies, of which 99.2% are MSMEs: 93.7% are deemed micro businesses, 4.2% small businesses, and 1.3% medium-sized businesses [1]. It is necessary to support the viability of these companies and boost their quality, productivity, and sustainability. For Mexican manufacturing MSMEs to achieve a development that responds to the current needs and pressures of the national and international environment, they must remain open to the possibility of including innovative activities in their competitive strategies, which will lead to overall innovation in terms of quality, productivity, and sustainability.

It is well known that innovation generates multiple benefits for manufacturing MSMEs, such as maintaining market positioning, entering new markets, diversifying the range of products, improving the ecological environment, creating flexibility, and improving working conditions, among others. However, the innovative performance of Mexican manufacturing MSMEs is deficient. In this regard, in the 2017 survey on Research and Technological Development (ESIDET) conducted by the INEGI, it is noted that, out of 50,261 companies surveyed, with less than 250 employees, between 2014 and 2016, only 5290 worked on at least one product innovation project (goods or services), that is, only slightly over 10% [2]. The food industry is particularly prominent within Mexico's manufacturing sector and is also the subsector with the most MSMEs: 201,080 economic units [3]. The relevance of this industry lies in its size, dynamism, number of jobs created, and its contribution to overall production and added value. In 2022, the food industry accounted for 4.0% of Mexico's GDP, up from 3.5% in 2019, a percentage that has been growing steadily year-on-year [4].

Despite this, most companies in the food industry do not engage in innovation activities. According to the most recent 2019 Economic Census data, only 12.6% of 3543 large food companies carried out innovation activities in 2018 [3]. For their part, the managers of large companies in Mexico's food industry acknowledge the importance of innovation as a fundamental pillar of their strategy to face the competitive environment; however, they identify internal and external difficulties in the processes to bring innovations to the market [5]. Given this scenario, there is an opportunity for companies in the food industry in Mexico, particularly SMEs, to increase their innovative performance, for which they need to develop effective innovation strategies based on knowledge of the organization and its environment.

This chapter develops a theoretical and instrumental stance to the adoption of the systems approach to innovation in manufacturing SMEs, in six sections: first, some of the strategies identified in recent decades regarding how SMEs face the problem of innovation are reviewed and the main factors that these companies must take into

<sup>1</sup> In accordance with the "law for the development of competitiveness of micro, small and medium-sized companies", manufacturing companies with 0 to 10 employees are considered micro businesses, those with 11 to 50 employees are considered small businesses, and those with 51 to 250 employees are deemed to be medium-sized businesses.

## *Toward the Adoption of a Framework for the Systemic Management of Innovation in SMEs… DOI: http://dx.doi.org/10.5772/intechopen.112036*

account in order to carry out innovations are compiled in detail; second, the methodology used to carry out the documentary and field research for the study is described; third, using the aforementioned methodology, the systems approach is applied to define an innovation management system for SMEs in the dairy sector, with identifiable components—innovation capabilities, innovation activities and innovations—as well as an explicit purpose; fourth, a framework for the systemic management of innovation in SMEs in the dairy sector is described, divided into three phases—Analysis, Decisions and Actions—, which instrumentalize the proposed innovation management system; fifth, the case of the implementation of the framework for the systemic management of innovation in a Mexican SME that carries out an innovation in its manufacturing process to increase its competitiveness and access the international market is described; and sixth, the results obtained are analyzed and conclusions are drawn.
