A study of factors influencing disruptive innovation in Chinese SMEs

Although around 99% of companies in China today are small- and medium-sized enterprises(SMEs), their innovative status is not optimistic, being constrained by lack of funding, size,and experience. Nevertheless, disruptive innovation provides an opportunity for SMEs tosurpass the large companies. This paper analyses external and internal factors influencingdisruptive innovation in SMEs, and compares those factors between low-end disruption andhigh-end disruption. The results of this empirical study suggest that factors influencing highenddisruptive innovation include government support, external knowledge sources, strategicsupport, and dominant position of R&D; while the factors influencing low-end disruptiveinnovation are cooperation with venture capitalists, external knowledge sources, dominantposition of R&D, and entrepreneurs’ innovation willingness. Two case studies are describedto illustrate our results.