Innovativeness of small and medium companies

Small and medium companies are faced with serious challenges such as: widening of global economy, a lethal struggle for markets, a drastic shortening of a product duration, quick technological changes, structural transformations and others. In order to respond to these challenges companies must constantly increase their productivity, make the quality of the product and services better, develop new products and meet consumers' requests and wishes. Shortly, companies must always be innovative, because the imperative of a company's modern making business is the improvement of all components of the structure and company's making business. The ability of small and medium companies to bring more and more quality, functional and cheaper products to the market shows the development of innovation processes in these companies. The most common innovations in small and medium companies are new products representing a guarantee for their successful work. Small and medium companies are more flexible and adaptable concerning their environment, so they can more easily adjust themselves to new circumstances regarding the need of making innovations in the sphere of products and services. There are both special role and influence of enterpreneurial innovations on the development of small and medium companies. They represent a key factor of the economy development in Serbia, for, according to relevant facts, there are over a hundred thousand companies and over two hundred thousand enterprenerus employing 60% of all employed workers and participating in making 50% of the national gross profit. The aim of this research paper is to point out the need of increasing the innovation degree of small and medium companies through the production and service trades structure in which a new product has a main role.