Non- Technological Innovation and Performance

Paper aims at examining the factors that resulted in varying degree of performance that has been measured by the profitability of firms. The data for the study come from ICT SMEs in twenty-five member states of the European Union. The study is based on primary data collected from sample firms during October 2006 and March 2007. The focus of the paper is on the contribution and prioritisation of innovations in three areas, namely: process, organisational, and marketing. Findings of the study suggest that firms that concentrated their innovation activities on marketing and sales performed better than the rest. Results also suggest that preference of global markets followed the same trend as that of marketing innovations with regard to performance. The other factors that discriminated three group of firms categorised on the basis of performance were size of firms and networking with technology parks or incubators. Main source of better performance stems from the growth of demand in the target markets