An innovation activity model for Very Small Entities in the software sector: an empirical study

Innovation management is a subdiscipline of management that studies the rules that govern the generation, diffusion, adoption of innovation, and relationships between innovation inputs and outputs. A great number of innovative products and services depend on software. In the software industry, many small entities act as subcontractors that develop components that are later integrated into larger industrial systems. However, these small entities do not have the resources needed to support long-term R&D activities and they also lack innovation management models which makes the planning and execution of innovation management difficult. These same small enterprises face similar challenges in the software development process. However, the ISO/IEC 29110 standard provides small enterprises with a clear path in implementing a systematic software development process. The planning and execution of innovation management activities may also benefit from a similar approach. This article describes an innovation activity model suited to the characteristics of small entities whose main stream of revenue is software development. Using the existing literature, standards, and the practical experience of companies with a successful history of developing innovative software-based products, this study identifies the activities and practices that lead to the development of innovative products. Interfaces between innovation management activities, software development processes, and work products are also identified.