From Periphery to International Pioneers: Reimagining Innovation Practices of SMEs in Peripheral Regions

Purpose
Although empirical and theoretical studies have examined the innovation practices of firms for internationalisation, the ways in which small and medium-scale enterprises (SMEs) operating in peripheral regions manage and reimagine innovation practices are still underexplored and under-theorised. Hence, this study aims to explore and map the factors that influence the innovation practices of SMEs operating in peripheral regions. In addition, the study explores the strategic resources SME managers use to manage innovation during internationalisation.

Design/methodology/approach
The study uses a qualitative method that is theoretically grounded in deductive interviews conducted with 21 SME senior managers and 2 regional experts in the peripheral region of North East England, UK. In this area, SMEs encounter several constraints related to firm-level and regional resources. Data were analysed through an iterative and thematic process using the Gioia approach.

Findings
Findings reveal that the innovation activities of SMEs in peripheral regions are informal, nonlinear and adaptive iterative processes, informed by internal and regional constraints. The authors also found that enhancing innovation performance for internationalisation requires the calibration and reconfiguration of internal capabilities in alignment with regional resources.

Research limitations/implications
Findings demonstrate that the innovation process of SMEs in peripheral regions is often nonlinear, iterative, experimental and informal. It highlights how SMEs navigate complex challenges, leveraging and reconfiguring diverse capabilities and regional resources to optimise innovativeness and internationalisation.

Practical implications
The study’s findings can assist SME managers in leveraging diverse capabilities and resources for improved innovation and internationalisation performance in peripheral regions. In addition, it informs policymakers on the need for tailored and adaptive innovation policies that reflect regional constraints and needs.

Originality/value
This research contributes to theories and empirical studies in the fields of innovation and internationalisation. It extends the resource-based view and dynamic capability theory by demonstrating that peripheral SMEs operating under severe constraints do not follow formal and structured processes. These SMEs recalibrate and reconfigure firm-level, regional resources to build capabilities for innovation by leveraging nonlinear, experiential and iterative methods.