Innovation and SMEs financial distress during the crisis period: the Greek Paradigm, The Greek Debt Crisis in Quest of Growth in Times of Austerity
In modern economies characterized as “knowledge-based,” the main factor determining the performance of a firm in terms of survival and productivity is innovation (Markatou 2011). In literature, many writers are expressing similar contexts. According to Sum (2013), innovation is an important factor for firms’ success and competitiveness especially for those located in environments where changes in the market are continuing and, as reported by Kumral et al. (2006), in such environments, a firm’s ability to innovate and to become financially viable is closely connected with the formation of a comparative advantage. Todtling and Trippl (2005) include innovation as an essential component of economic growth and firms’ financial effectiveness, and Dressler (2013) considers innovation as a “key factor” in order for businesses to grow, consolidate and to ensure durable profitability in a competitive environment. Moreover, Klomp and Van Leeuwen (2001) linked the innovation with firms’ revenues performance, productivity and employment growth, while Soriano and Huarng (2013) argued that innovation is “the only business related more closely than anything else to economic growth.” According to Eurostat (2004), innovation is “the introduction of a new or significantly improved product (good or service) or the application of a new or significantly improved process, organizational a market enterprise marketing process or method.” Still, according to Kumral et al. (2006), innovation is “a complex sequence of events that include all activities to develop or create new products, services or processes on the market.” Further, the Keupp et al. (2012) define innovation as “a new product, a new service, a new technology in the production process, a new structure or management system, or a new plan or program for organizational members.” According to Sengupta (2012), innovation involves changes in organizational and managerial competencies, developing new markets and new products. The Lee et al. (2010) describe innovation as a process divided into two parts: the “search technology” for technological opportunities and the “technology exploitation” of market opportunities, while also point out that the second part is mainly directed at SMEs. Another description given by Freeman and Soete (1997), where, according to which, the innovation consists of two parts: the recognition of a potential market for a new product or process and the technical knowledge that is either generally available or is new scientific and technological knowledge derived from research activity. Finally, Smits (2002) attempts to provide a simplistic definition of innovation, noting however that this is a complex process that takes place in terms of products, companies, industries, and at national and international communities.