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Introduction
The relative advantages or disadvantages to a manufacturing company of focusing on single or tightly-related portfolio of products or, of diversifying have been addressed by a number of authors ([33] Porter, 1980; [18] Kanter, 1989). For small to medium-sized enterprises (SMEs), there is often little choice. Many will have entered the market as single product or technology-led companies without the finance to broaden their product range even if this were considered strategically desirable ([42] Storey, 1982). A major issue for all SMEs in this position and particularly for those in existence for some years is how to survive by maintaining or increasing market share through innovation. Such companies are particularly vulnerable to competition from organisations both within and outside the sector that propose alternatives to the product, raw materials/components and the manufacturing process or work organisation. While key characteristics of large innovating firms are better known ([32] Pettigrew, 1985; [31] Pavitt, 1991; [12] DTI/CBI, 1993/1994), little research has been done on innovation in SME manufacturing single products, although the sector was reported to be critical to the British economy by the DTI report ([12] DTI/CBI, 1993/1994). According to this report, manufacturing companies make one-fifth of Britain's economy, employ about four million people and many more indirectly. Manufacturing SMEs (SMMEs) not only directly provide a major component of manufactured output they are the essential seeds from which larger businesses grow. Their importance has also long been recognised through a range of government support initiatives ([11] Duan and Kinman, 2000), for example, £15 million government funding went to SMMEs to provide hands-on help with new manufacturing technology and best practice ([12] DTI/CBI, 1993/1994). Through regional centres for manufacturing excellence, practical advice was also offered to SMMEs.
In the 1990s the manufacturing sector was reported to have experienced a slow pace of output growth ([45] The Times , 1996), thus in order to survive and maintain their competitiveness in the market place, innovation is fundamental to SMMEs. Larger manufacturing companies can often invest in new technologies and equipment, providing world-class skills and training to their workforce and winning new markets, which is clearly not the case for their smaller counterparts. However, studies by [26] Mosey et al. (2002) and [25] Mosey (2005) showed that a small...