e challenge better than most, and have earned well-deserved reputations for innovativeness that have been enhanced over time. They have done this mainly by trying to recreate many of the salient characteristics of the SME within a larger organisation context. Take the example of 3M, which is increasingly being used as the benchmark by many established firms hoping to revitalise their capacity for corporate entrepreneurship. Among the most prominent features of the 3M approach is the explicit strategic commitment to competing on innovation, institutionalised in the company's ongoing formal aim that at least 25% of its sales should come from products introduced within the most recent five-year period. Furthermore, 3M has developed a corporate culture that celebrates as heroes those enterprising individuals whose persistence and commitment have triumphed over management indifference or bureaucratic rejection. The company's '11th Commandment' is 'Thou shalt not kill a new product idea'. Its internal institutional context encourages experimentation and accepts failure as a productive stage on the road to success. It also creates structures (like the Technical Senate and the Annual Technology Fair) that facilitate grass roots scientific communication across horizontal and vertical organisational boundaries (Bartlett 1995). Differences in internal institutional context alone will only go part of the way towards explaining why SMEs are often better innovators than their larger counterparts. There is also evidence to suggest that SMEs tend to be more actively and extensively networked into their locality/region, with implications for innovative capability. Evidence for this is provided by Almeida and Kogut (1997). Focusing on patents in the semiconductor industry in the US, they show that small-firm start-ups "are unusually oriented toward the exploration of diversity by targeting less crowded technological fields", and that the exploration of s...
