Diversity as a Driving Force of Innovation of SMEs: A Case Study from Quebec (Canada)

Abstract

Globalization and openness of markets have created a business ecosystem where firms from different markets with diverse cultural backgrounds compete and collaborate. Cultural diversity and administrative, economic, and legal differences affect multiple aspects of business transactions among the collaborating and competing parties in terms of negotiation, collaboration, and market diversity. Cultural diversity is considered a barrier to achieving organizational goals. This paper explores how cultural differences can influence innovation in high-tech SME firms. Our research design is based on a single case study in Quebec (Canada). Our findings show that well-managed cultural diversity can promote innovation and lead to the competitiveness of high-tech SMEs. This study implies that managers must carefully manage cultural diversity and create a win-win situation by fostering creativity and innovation.