Samaneh Darbandi - Department of MBA, Shahid Bahonar University of Kerman, Iran
Alireza Naderi - Faculty of Management, Shahid Bahonar University of Kerman, Iran

Small industrial firms have proper innovation abilities due to potential changes. In this paper, the innovation capacity of ۱۰۷ active small enterprises located in industry towns and vicinal of Kerman city has been investigated and analyzed. The results of research indicate that the innovation capacity in small enterprises in statistical viewpoint has reverse relation with the debit to sell ratio and has no meaningful relation with annual expenditure in research and development (R&D) activities and employee’s education level. In other hand, the relationship between the manager's education level and firm's innovation capacity are examined. Finally, based on the findings, have proposed some approaches to enhance the ability of SMEs to successfully design the innovation processes.

Innovation Capacity, small and medium enterprise, Industry town, Kerman, Auditing