The factors constraining innovation performance of SMEs in Croatia

The aim of this article is to identify innovation barriers that limit innovation performance of small and medium enterprises (SME) in Croatia. Data are obtained using an online survey. The sample consists of 94 SMEs that have experience in innovation activities. The impact of constraints to innovation is measured on five-point scale. Employing the factor analysis, we reduced number of variables to four factors. Cluster analysis is used to group SMEs according to factors that constrain their innovation activities. SMEs are grouped into three clusters. Results reveal that firms are mostly constrained by external factors. In two out of three clusters, firms report high intensity of financial constraints to their innovation activity. The findings reveal that the least pronounced constraints to innovation in SMEs in Croatia are organisational constraints.