Abstract

In theory, IT integration through applications such as EDI and ERP provides an organization with the ability to exploit innovation capabilities. Based on survey data obtained from 309 Canadian manufacturing SMEs, this study aims to identify the enabling effect of IT integration upon the innovation capability of manufacturing SMEs, that is, in terms of growth and productivity outcomes, and to verify if this effect is subject to industry influences. The results underline paradoxical effects of IT integration. Overall, IT integration has an enabling effect on the relationship between process innovation capability and growth, and especially in low-tech SMEs, but a disabling effect on the relationship between process innovation capability and productivity, and especially in medium to high-tech SMEs.