This paper investigates the impacts of organizational factors on innovation and performance in small, knowledge-intensive firms. The study focused on Norwegian firms with 5 to 30 employees. The findings indicate that differentiating between product, process and market innovation provides a better understanding of the factors that drive innovation. This strategy seems to influence innovation. For instance, low-cost strategy positively impacts on both process innovation and market innovation. Also, external relationships significantly influence innovation: for instance, market participation in a product development context has a significant influence on product development.
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