If innovative SMEs are better off compared to non-innovative SMEs, how do innovative
SMEs engaged in new products/processes compare with innovative SMEs engaged in
improvement of existing products/processes? In auto and electronic sectors, innovative
SMEs engage in the improvement of existing products/processes registered a higher sales
growth than innovative SMEs engaged in the development of new products/processes
whereas in the machine tool sector, sales of the latter grew faster than that of the former
(Table 8). How far SMEs have benefited from their innovations to increase their sales
and grow in size of investment and labour would depend more on how far they have been
able to satisfy their customers’ needs and requirements rather than on the nature of
innovations in terms of new products/processes or improved products/processes. If
improvement of existing products/processes as demanded/required by their customers is
appropriately done, it may prove to be more useful to increase sales than development of
new products/processes. What might be more decisive is customer satisfaction to expand
the market base of an enterprise and grow. Given this, it would be difficult to say whether
new products/processes or improved products/processes are more helpful to SME growth.