ROLE OF DEVELOPMENT INSTITUTIONS IN FOSTERING INNOVATIONS IN INDIAN SMES – AN EMPIRICAL STUDY

Innovation refers simply to the creation and application of a new idea to create value in a certain context. Some of these ideas and value creation applications may translate into incremental changes such as the introduction of additional features in a consumer product; while others may lead to radical or even revolutionary changes - such as the launch of the PC or the iPod. As global competition intensifies and information-based innovation becomes more important, the business sector has been internationalizing knowledge-intensive business functions, including R&D. At the same time, companies are increasingly opening their innovation processes and collaborating with external partners including suppliers, customers and universities. Creating effective innovation systems is vital for enhancing access to knowledge from around the globe and speeding up the conversion of that knowledge into value adding products and services. Such research takes a broad definition of innovation covering innovation in products, services, processes, business models and organizational structures. The rise of India as a growing power not only in Asia but also at the global stage would require not only a macroeconomic uplift but also a thorough realization of innovation by the SMEs. The study can dwell upon the significance of cluster based approach and business development service providers and ways and means to inculcate innovation amongst SMEs along with the best practices being followed in various countries that can be replicated in the Indian framework