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This paper traces the nature and strategy of product innovations of two SMEs in two different economic environments — one each in Japan and India. While the background of entrepreneurs and internal environment are similar, what distinguishes the two is the external environment. Though external sources of support appear similar outwardly, Indian external sources lack the much needed reputation for the capability of delivering productive assistance for technological innovations in manufacturing enterprises. That is why the Japanese SME could take advantage of its external sources but not the Indian SME. Further, the domestic market has ably supported and absorbed innovated products of the Japanese SME whereas the Indian SME has increasingly targeted its innovated products at the international market.
M.H. Bala Subrahmanya (Wed,) studied this question.