The Importance of Research and Development for Innovation in Small and Large Canadian Manufacturing Firms

The debate over the appropriate function of government policy for research and development (RD they each have their own advantages. Small firms are more flexible but can suffer from cost disadvantages due to scale. They overcome their disadvantages by networking with their customers and by showing the same flexibility in their R&D process that they exhibit elsewhere. They rely less on dedicated R&D facilities and more on the flexible exploitation of R&D as opportunities arise. They also network with customers in order to adopt their suggestions for new innovations.