NEW PRODUCT DEVELOPMENT AMONG SMALL INDUSTRIAL FIRMS: A COMPARATIVE ASSESSMENT OF THE ROLE OF TECHNICAL SERVICE LINKAGES IN TORONTO AND BUFFALO*

This paper compares the innovation performance and external linkage characteristics of small industrial firms in Toronto and Buffalo. The goal is to show that technical consultants in the producer services can play a significant role in the product development efforts of small manufacturing firms, especially those that operate in technology-intensive sectors. Data from two industrial surveys are presented that suggest a positive relationship between innovation and the scale, nature, and geographical extent of external service utilization. It is argued that technology-intensive firms in declining regional economies may operate at a competitive disadvantage relative to firms of comparable size in more prosperous regions. The paper concludes with a brief agenda for future empirical work.

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