Evaluating innovation development among Brazilian micro and small businesses in view of management level: Insights...

This research aims to analyze management and innovation patterns among micro and small businesses (MSBs) that participated during 2015-2016 in the Local Innovation Agents (LIA) Program from the Brazilian Micro and Small Business Support Service (SEBRAE). Complemented by factor analyses, two-step cluster analysis was applied on 6674 MSBs' management dimensions to identify group patterns and statistical tests explored further cluster differences regarding management and innovation dimensions, besides innovation improvement throughout the program. Results were multifaceted. First, complementary factor analyses showed that management dimensions compose one factor with similar loadings, thus in accordance with their predictive importance found in the cluster analysis. Second, two main clusters were identified in terms of management level, which also presented significant differences regarding innovation levels. Third, considering a before-and-after self-comparison, by and large, innovation was significantly improved by both clusters. Fourth, the highest developed cluster presented higher improvement rates in most innovation dimensions, thus benefiting more from the program, except for two marketing-related innovations, which improved similarly by both clusters. Overall, even though the LIA Program was effective to leverage MSBs innovation, higher efficiency rates would be bounded to fewer participating MSBs, and hence policy planners should be aware of this tradeoff.