Title: Small, young firm flexibility and performance in the context of disruptive innovations

Authors: Sofy Carayannopoulos

Addresses: School of Business and Economics, Wilfrid Laurier University, Waterloo, Ontario, N2L 3C5, Canada

Abstract: Flexibility is a quality that is frequently associated with small, young firms. However, there has been limited attention given to understanding how flexibility is linked to small firm performance, and limited recognition that flexibility is costly and only advantageous in certain environmental contexts. This paper explores small, young firm flexibility advantages in the context of commercialising radical, architectural, modular, and incremental innovations. Multiple dimensions of flexibility are examined to identify the innovation regimes in which small, young firms may survive and succeed against larger, more established incumbents. The propositions developed extend understanding of the liabilities of newness, start-up performance and flexibility, and the displacement of incumbents by new firms.

Keywords: small firms; young firms; firm performance; disruptive innovation; start-ups; liabilities of newness; learning flexibility; problem-solving flexibility; resource reconfiguration flexibility; network flexibility; incumbent displacement; radical innovation; modular innovation; architectural innovation; incremental innovation.

DOI: 10.1504/IJEIM.2017.081467

International Journal of Entrepreneurship and Innovation Management, 2017 Vol.21 No.1/2, pp.105 - 118

Received: 22 Jun 2013
Accepted: 18 Jun 2014
Published online: 10 Jan 2017 *

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