Abstract

Information system (IS) innovation is one of the most important types of innovation. IS innovations frequently demand the fashioning and incorporation of new roles, responsibilities, relationships, lines of authority, control mechanisms, work processes and work flows-in short, new organizational designs. The survival and growth of business enterprises increasingly depends on their ability to respond to globalization and rapidly changing in market demands, technologies and consumer expectations. Small and Medium enterprises (SMEs) constitute 94% of Iranian firms. According to Iran statistic website the value added of 94% of Iranian firms is just about 10% of the whole value added in country. This study assumes the lag of IS and innovation is the reason of uncompetitive nature of Iranian SMEs. This paper reports on the results of a study that examined Information system (IS) innovation among a sample of 86 managers of small and medium-sized enterprises (SMEs) in Iran. As the survey results show that the most information resource is clients, customers and acquisition of external knowledge has a positive and significant effect on innovation. Iranian SMEs are not collaborating with universities and higher education institutions; they do not see university as a main source of information.

Keywords: IS innovation, innovation, SMEs.