Innovation and Competitiveness in SMEs: The Local Experience in San Luis Potosi, Mexico

At this time, small and medium enterprises (SME) represent the national productive force. They generate self-employment in the Mexican business. There are determining factors that are directly related to the generation of opportunities that maximize performance and level of participation of the SMEs in the local and international level. This paper analyzes the relationship between innovation and competitiveness through the operational activities measurement in small and mediums enterprises in San Luis Potosi, Mexico. The paper develops theoretical framework based on literature review, which encompasses innovation and competitiveness terminology and the connection within SMEs. The paper also touches on the SME's economic and occupational work dominance taking place in commerce, services and manufacturing business activity. Finally, the paper focuses on a quantitative paradigm to measure the competitiveness and innovation as variables. The results are based on a sample of 65 SMEs and show that there is a direct relationship between innovation activities and competitiveness replicated in the operations of the companies studied in the city of San Luis Potosi, Mexico.