This leads us to the question—what drives manufacturing SMEs to technologically
innovate? If a firm has to technologically innovate, it should have in-house technological
competence in the form of technically qualified and motivated entrepreneurs or managers
with innovative ideas and technically skilled employees. Similarly, there must be a
market demand for the innovated products in the form of an explicit customer demand or
implicit market opportunities. Of course, the relative importance of these internal as well
as external factors might vary from firm to firm or from industry to industry or even from
economy to economy and from time to time.