Working Paper
Is that Innovation?

Assessing Examples of Revitalized Economic Dynamics among Clusters of Small Producers in Northern Vietnam

This paper addresses the question whether innovation is within reach for small enterprises in developing economies by studying four cases of new technologies, products and business practices in traditional craft in Northern Vietnam. The paper starts with reviewing definitions of innovation since Schumpeter. It concludes that newness, value creation and process are time and again considered as the key-elements of innovation. Innovation, hence, may be summarized as the process of introducing something new that creates value. Subsequently, this theoretical definition is operationalized into an innovation assessment instrument and applied in the aforementioned cases. The instrument verified the occurrence of innovation in three out of four cases of small producers’ clusters in Northern Vietnam. The entrepreneurs managed to implement innovation on their own strength and upon their own initiative. This provides evidence that small enterprises in developing countries are indeed able to take part in the process of increasing competitiveness through innovation.