**2. Strategies for innovation in SMEs**

Innovation can be an objective or a means that helps organizations to achieve their competitive strategy. In any case, for most researchers on the subject, the innovation strategy should be aligned with the organization's competitive strategy to obtain the greatest benefits that innovation can provide [6]. For several decades, several studies have been conducted on the strategies adopted by SMEs and the variables that should be considered to innovate. Some of these are described below.

Three types of strategies can be identified, as shown in **Table 1** [7], based on the position that SMEs have in relation to their environment.

Similarly, according to the role played by demand, two types of strategies adopted by SMEs can be identified, as shown below in **Table 2** [8].

SMEs with proactive or demand-driven strategies are more likely to succeed and remain in the market than those with reactive or push strategies. Organizations with a proactive demand-driven strategy are the most innovative entrepreneurs regarding environmental issues. In any case, the environment and demand are not the only factors to consider when developing and adopting an innovation strategy.

In general, the innovation strategies of SMEs are informal and different from those of large companies [9]. In order to develop an explicit innovation strategy, SMEs should consider their organizational processes, market position, technological trajectory, the possibility of competence building [10], the sector of the economy in which they operate, their degree of technological diversification and division of labor [11],


Source: *Adapted from OECD (1993). Small and medium-sized enterprises: technology and competitiveness (p. 25). Madrid, Spain: Mundi-Prensa Libros.*

#### **Table 1.**

*Types of strategies adopted by SMEs in response to their environment.*


Source: *Adapted from Altenburg,T. & Eckhardt, U. (2006). Productivity enhancement and equitable development: challenges for SME development (pp. 20–26). Vienna, Austria: UNIDO.*

#### **Table 2.**

*Types of demand-driven strategies adopted by SMEs.*

the business they are in, the market they serve, the innovations required, how attractive the innovation opportunities are, and the best-known innovation practices [12].

There are clearly several characteristics that MSMEs themselves must consider in order to develop and execute their own innovation strategy. In this regard, different authors describe a series of generic factors relating to the competitive position and innovation possibilities of this group of companies. The following is a list of some of the factors mentioned in scientific and academic texts which, in our opinion, should be considered when developing an innovation strategy for an SME.

### i. **Operational strengths**

