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Based on a number of detailed, in‐depth, cases selected from 30 face‐to‐face company interviews and placed in the context of the literature, this paper will argue that targeted financial support of start‐ups, the notion of “picking winners”, is not a viable alternative to blanket cover. These selected cases serve to illustrate the complexity and variability of small firm development which, in turn, negates the validity of pre‐start predictive modelling for this sector. The paper will proceed to argue, on the basis of the evidence, that, since the form which an organisation takes and the ability of an entrepreneur to manage within the given environment are, to a greater extent, dictated post start‐up, only then can firms with significant growth potential be identified. Thus, since a firm’s true form and promise is uncertain pre‐entry, any criteria used to isolate those with the greatest potential will be, at best, arbitrary.

Based on a sample of 245 West Midlands manufacturers, this paper investigates small firms’ perceptions regarding the skills (and skill sources) required to improve innovation. While there are very few observed differences in perception between the more and less innovative firms (the employment of graduates is a notable exception), a number of interesting findings emerge. Principal among these, all firms, regardless of innovative classification, identify enhanced technical skills as the primary means to achieving improvements in innovative output (followed closely by marketing competencies). Improved management skills and, in particular, finance and exporting skills do not rank high on the small firms wish list. Moreover, sample firms overwhelmingly display a preference for improving in‐house skills, rather than increasing the number of specialists or accessing external expertise. To rephrase, there does not appear to be an external “skills shortage” but, rather, an internal “skills gap”.

Many scholars analyse networks and learning to understand how individuals successfully create and manage new ventures. Based on the assumption that entrepreneurs learn from networks, the purpose of this paper is to examine which types of difficulties encourage entrepreneurs to use networks to facilitate learning, whether entrepreneurs change networks to deal with such difficulties, and which network characteristics facilitate learning.

Networks are considered a potential source of learning, namely, the cognitive process of acquiring and structuring knowledge, creating meaning from experience and generating new solutions from existing knowledge. Through networks, entrepreneur share information and discuss opportunities and problems. Using an innovative approach combining story telling and network mapping, this study analyses how entrepreneurs use networks in learning. The data collected from six entrepreneurs working in knowledge-intensive sectors enables examining the learning process ensuing from the interactions between entrepreneurs and their contacts.

The findings show that entrepreneurs construct different types of networks in response to their difficulties, not in relation to products or technologies, but to learn to overcome self-crises, external threats, management and organisational issues. The findings reveal that entrepreneurs develop networks dominated by strong ties for exploitative learning and networks dominated by weak ties for explorative learning.

This study contributes to literature on networks and entrepreneurial learning. More specifically, the study provides evidence of learning in the context of networks, which is a relatively overlooked area in entrepreneurship literature, identifying the role of difficulties in determining the type of learning through networks and the related mechanisms.

Though KIBS constitute only a small proportion of all services, researchers frequently accord them a significance beyond that indicated by their share in employment or value added (Tether & Hipp, 2002; Gallouj, 2002). For example, KIBS are held to play ‘an increasingly dynamic and pivotal role in ‘new’ knowledge-based economies’ (Howells, 2000, p. 4), as sources of important new technologies, high-quality, high-wage employment and wealth creation (Tether, 2004). Unfortunately, while much of the rhetoric seems intuitively reasonable, one inevitably encounters definitional difficulties in delimiting the specifics of innovation in KIBS, with a variety of, more or less operational, working definitions employed by the academic literature (Wong & He, 2005).

This paper aims to understand the factors associated with perceptions of venture capital as a barrier to innovation in an important subset of knowledge-intensive service firms – technology-based business services. A general and longstanding neglect of services in studies of innovation and a common focus of innovation studies on the availability of, and demand for, risk capital has been noted.

In exploring these issues, the authors draw on survey data collected from 264 technology-based service firms located in Scotland and Northern England. The data are subjected to bivariate and multivariate statistical analyses to help explore the extent of demand-side risk capital concerns.

It was found that smaller, faster growing and R&D-intensive firms perception greater equity barriers. Moreover, firms who are relatively happy about the managerial competencies available to them, but who identify deficiencies in marketing skills and the availability of external debt finance (which may say something broadly about their financial neediness), are shown to be “needy”.

Studies of venture capital demand are relatively rare. Studies involving innovative service firms are rarer still. Given the prominent role of service firms in advanced economies and the changing perspective of the role of services in innovation, studies of financial constraints to innovation in services are timely. Innovation policy in advanced economies continues to be premised on patterns identified in manufacturing industries. This paper contributes to a broader perspective that views [technology-based] business services as dynamic innovation actors.

Small firms rely on a variety of network partners, and in various roles, to initiate and implement innovations. While past typologies of innovation networking were defined at the level of firms or industries, the purpose of this paper is to develop a typology at the level of innovation objects.

Drawing on survey data of 594 innovations in Dutch small firms, cluster analysis is applied to develop a typology of networking patterns for innovation in small firms.

In total, six patterns of innovation networking were identified: supplier‐based, customer‐based, informal‐based, bank/accountant‐based, science‐based and government‐based. The supplier‐based pattern is most dominant and characterized by modest and simple contributions from networking partners, while governments tend to be involved in innovations marked by voluminous and complex partner involvement. Validity of the typology is suggested by two findings: more voluminous and complex networking patterns are correlated with firms’ internal capabilities, and with the newness and competence requirements of innovations.

For practitioners the typology provides a more fine‐grained view on how innovations in small firms are developed. This includes the role of relatives and friends, bank and accountants, and remote partners such as governments – network partners which so far were not covered in typologies of innovation networking.

This paper presents new insights into the growth of small and medium‐sized enterprises (SMEs) engaged in vertical inter‐firm relationships. It adopts a processual and resource‐based perspective and focuses on the experiences of fresh produce businesses which have achieved high rates of growth while supplying the UK’s large multiple food retailers. The context in which these suppliers operate is shown to be a complex and dynamic supply chain, characterised by increasing structural concentration and close vertical linkages. The primary research investigates how certain SMEs have prospered in an apparently “hostile” environment. It includes a programme of matched‐depth interviews, conducted across the retailer‐supplier dyad. Content analysis of transcripts reveals six factors which appear to be strongly associated with the formation of “successful” relationships. In subsequent interactions, securing “developmental” supplier status appears to open the way to a self‐reinforcing cycle of Penrosian learning and reinvestment. This cycle contributes to growth in the supplier firm. The authors argue that, with certain crucial caveats, growth‐oriented SMEs can develop mutually beneficial relationships with much larger “customer” firms. The paper concludes by drawing out wider policy implications and indicating how this contextualised approach might be used in other contexts.