Entrepreneurship, Service Innovation, International Expansion and Performance in SMEs: Empirical Evidence from Finnish ICT Industry

Abstract

The thesis aims to clarify the mixed results of prior literature regarding the performance impacts of entrepreneurship and human capital through service innovation and international expansion. The thesis examines the factors affecting degree of internationalization (DOI) and performance in ICT SMEs. These factors are entrepreneurial orientation (EO), human capital and service innovation (SI). The data was collected via questionnaire from Finnish ICT SMEs. The results suggest that EO consist of three dimensions that have different impact in DOI and SI. Also DOI has inverted U-shaped relationship with international performance, whereas DOI-profitability relationship is linear. The results of the study suggest that SMEs should not blindly increase their DOI, and that strategic focus is important.