| Small firms have shown to be major contributors to the economy in the United States. Much of the work force is employed by small firms and they represent most of the firms in the U.S. on a percentage basis.;Innovation is considered to be a major driving force in the economy and has shown to be a major catalyst in economic growth. Innovation may take the form of product, service, management and process innovations. For this study an innovation was defined as: An innovation is the introduction of a new idea into the marketplace. An innovation may be embodied in a new or improved product or service, or it may be a process or management improvement. Note that innovations are not the same as patents. A patent will not necessarily reach the marketplace; an innovation will not necessarily be patented.;This study examined factors which influence how firms innovate and compared how the factors were affected by firm size. A mail survey was conducted of 200 large firm innovations and 400 small firm innovations. The survey consisted of a questionnaire which sought information about the innovating firm, their innovation, and their practices with respect to innovation. Comparisons were then made as to how these factors were different or the same for small and large firms.;Results of the survey showed that small firms, as compared to large firms, were more likely to have developed product innovations, used the innovation internally less of the time, had sales affected to distributors more frequently, reported more problems with marketing and distribution, used copyrights more often, filed patents less frequently, and used research and experimentation tax credits less often. |
