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1. Introduction
It has become commonplace to argue that in the contemporary "knowledge-based economy" (e.g. [15] Cooke and Leydesdorff, 2006; [63] OECD, 1996), characterized by both accelerating pace of change and increasing complexity and uncertainty, the ability of firms to adapt in their external environment and to remain competitive is closely related to their capacity to innovate and continuously upgrade and renew their knowledge bases, products and structures ([42] Johannessen et al. , 1999). As [60] Nonaka (1991, 96) puts it, "in an economy where the only certainty is uncertainty, the one sure source of lasting competitive advantage is knowledge". From the point-of-view of an individual entrepreneur, the knowledge-based economy is a mixed blessing: more and more information is freely available, but the decision regarding what information should be utilized and what should be ignored has become more complicated.
As it is now widely appreciated, in turbulent market economies, innovation is the elixir of life for firms, regardless of their size or other attributes. Growth, success and survival, all depend on the ability of firms' to innovate on a continual basis. By the same token, knowledge is understood as the main ingredient in the concoction of innovation. The prerequisite of every innovation is either the generation of new knowledge or, alternatively, and more typically, the combination of existing pieces of knowledge in novel, "entrepreneurial" ways ([69] Schumpeter, 1934; [21] Drucker, 1985). But what are the initial sources of innovative ideas and from where does the knowledge used in firms' innovation processes originate? In order to shed some light on these questions, this paper provides empirical evidence of the relationship between different information sources and the introduction of different types of innovation in entrepreneurial small to medium-sized firms (SMEs) located in a Finnish region of Northern Savo. The paper also addresses the question whether the introduction of different types of innovation is associated with the performance of firms.
Since "innovation" may refer to very different kinds of "newness" regarding products, production methods and technologies, markets, and organizational configurations, among other things, it is reasonable to assume that the sources of useful information may vary between different types of innovation. This possibility has been, however, recognized only fairly recently (e.g. [79] Tödtling; et al. , 2009;...