The study examined the extent to which lack of access to external funding constitutes a barrier to innovation for small businesses operating in traditional industries. The findings indicate that, these businesses do not view lack of access to funding as a barrier to innovation for any of the four types of innovation: product, process, marketing, or organizational. However, for most of the innovations they promoted, the levels of innovation were relatively low, and which naturally entails relatively low risk to businesses. The findings also indicate that, there is a relationship between product and marketing levels of innovation and lack of access to external funding. The study’s contribution lies in its focus on small businesses operating in traditional industries—businesses which though, essential to economic growth, have garnered less separate attention in the innovation sphere. The study points to a vicious circle in which these businesses do not promote innovation at high levels that would advance their own competitive advantage and require external funding. Because this funding is not within their reach, they continue promoting low-level innovation, and so on and so forth. The study may practically contribute by assisting policymakers as they draw plans dedicated to supporting innovation in small businesses.

Smart specialization is studied in the Arab–Jewish region of Haifa and Nazareth, with a focus on high-tech ventures created by Arab entrepreneurs. We find that not only did smart specialization occur under these complex conditions, but also it was spontaneous. It began with the sharing of entrepreneurial knowledge held by Jewish entrepreneurs through social networks set up by grassroots organizations. Policy initiatives in support of this process followed, helping to reshape the region’s socioeconomic structure. Therefore, we argue that smart specialization followed a four-phase process: a pre-phase of knowledge transfer between the two communities, followed by Foray’s three phases .

Purpose: The utilization of social networks is known to have an impact on micro-enterprise success. This study aims to examine the contribution of social networks in acquiring resources and their role in the enterprise’s success. Design/methodology/approach: A business’s success is influenced by its network structure and the network’s resources. The authors examine whether unique religious-cultural characteristics affect the social networks contribution to a business’s success. This model examines the network utilization of women entrepreneurs who own micro-enterprises in ultra-religious groups. The sample consists of 123 surveys completed by Jewish ultra-Orthodox women entrepreneurs in Israel. Data collection was conducted between February and June 2013. The authors used a snowball sampling approach where interviewees were asked to refer us to other entrepreneurs. In the hour-long interview, a questionnaire was used with open and closed questions. Findings: Findings indicate that strong personal ties provide a micro-enterprise with social legitimacy, emotional support and assistance in the management and operation of daily activities. However, contrary to the existing literature, network utilization did not contribute to enterprise success. That is, in religious communities in particular, social networks enable the existence of businesses, but do not contribute to their success. Practical implications: The practical implications of this paper are the mapping of the social network resources used by the business owner, such as financial consultations or professional assistance, as well as distinguishing between strong and weak ties, which reflect the intensity of the contact for better use of the social network by the entrepreneurs. Originality/value: This study examined social networks’ contribution to the acquisition of resources, as well as the part they play in the success of ultra-orthodox women micro-entrepreneurs and perhaps other religious and minorities groups.

In recent years, the Reverse Mentoring (RM) model has gained popularity in large companies. Although the prevailing RM model—junior employees mentoring senior employees—benefits both groups and promotes innovation, small and medium-sized enterprises (SMEs) do not implement it due to lack of economies of scale, organizational capacities, and skilled junior employees. We devise a new RM model for SMEs that overcomes these disadvantages. First, the intervention of an intermediate, trusted professional entity initiates and supports the program for several companies; second, the mentors are not junior employees, but external graduate students with education in innovation. A pilot experiment was tested in the state of Ceara, Brazil. The preliminary findings support the new model’s feasibility and efficacy for SMEs. The intervention stimulated significant innovative ideas and resulted in out-of-the-box thinking, identification of potentials for innovation opportunities, and adaptation of an open innovation approach, which is important for SMEs with limited financial and non-financial resources. This study contributes to the literature on SMEs and RM by offering a new model that can overcome existing market failures experienced by SMEs. Empirical testing demonstrates its feasibility.