Learning processes in growth-oriented SMEs : the Portuguese case

The learning processes that take place within small and medium size enterprises (SMEs) have attracted increasing attention among academics and managers. Growth-oriented SMEs in particular have been a focus of academic attention given their importance to processes of economic growth, although understanding of the learning processes within these enterprises remains limited, especially with regard to their interplay with intermediate and peripheral economic contexts. This qualitative study, based on nine case studies of growth-oriented SMEs, provides important insights into the learning process which underlies their entrepreneurial capability and ‘openness’ to innovation across different sectors operating within the intermediate economic context of Portugal. The study analyses two different groups of SMEs, five from high tech industries and four from traditional manufacturing industries, to enable comparative analysis of how sectoral context can trigger different responses, learning processes and organisational outcomes. Primary data collection within the selected case study firms was undertaken through combining documentary sources with semi-structured interviews with owner-managers and other key actors. Qualitative analysis centred on gaining insights into processes of entrepreneurial learning and comprised both within-case and cross-case analysis. The findings of this research contribute to knowledge on the learning processes within growth-orientated SMEs in intermediate economic contexts in three main ways. First, due to the constraints of the domestic economy, all companies internationalized whilst relying heavily on their in-house capabilities. In this internationalisation process, high-tech companies were characterised by more formal, decentralised and cooperative learning arrangements than traditional companies, which tended to be more ‘closed’ and showed simpler and more informal learning. Second, high-tech companies demonstrated a larger and more varying combination of learning processes compared to their traditional counterparts. In the high tech companies, learning was not only more systematic and more frequent, but also operated at a wider inter-organisational scope, with more radical change and a greater openness in terms of innovation. Third, the owner-managers were the principal knowledge gatekeepers of the learning processes through absorbing and disseminating external complementary knowledge and via varied learning modes. Owner-managers were therefore critical for integrating their entrepreneurial capabilities within the organisation and in moderating the firm’s propensity to engage in ‘open innovation’. This moderating role was accomplished by external interactive learning, internal planning and experiential learning. This augmented the firms’ absorptive capacity – their ability to access and apply external sources of knowledge within their innovation processes – and entrepreneurial capability – their ability to identify, select, shape, and coordinate internal and external conditions and resources to explore opportunities. These findings are of significance to owner-managers with regard to better addressing SME needs in terms of expanding their international business knowledge and stimulating greater regional cooperation.