The 'hidden innovation' of industrial SMEs in Spanish capitalism: Management, strategies and repertoires of innovative practices in Catalan manufacturing SMEs

Innovative and dynamic manufacturing SMEs have been and continue to be one of the bases of collective prosperity in various European countries and regions. Based on a multi-level sociology that integrates the micro level (firm and organization), meso level (regionallocal and sector) and macro level (state-related national capitalism), the article analyses the innovation activity of industrial SMEs, which may be called hidden innovation because it does not appear in conventional indicators. Based on 22 semi-structured interviews with managers of manufacturing SMEs of Catalonia, Grounded Theory is applied to construct descriptive categories and conceptual propositions in order to understand and analyse the social relations and typical processes SMEs use to innovate. Three main issues are analysed: discursive-cognitive frameworks, management and planning, and strategies and repertoires of innovation practices. The main contributions are as follows. At the micro level, the participation of SMEs in the sector-related value-supply chain or network exerts a decisive influence on their innovation repertoires, and two typical repertoires of innovation practices have been found: relatively autonomous practices and client-dependent practices. At the meso level of Catalonia's innovation and business system, problems have been found in producing local collective competition goods due to institutional aspects and public policies. At the macro level, Spain's capitalism displays a low development of institutional factors to provide its business system with innovation capacities.