Innovation is crucial for small enterprises to become and remain competitive in the global economy. In this book, the authors have combined theoretical insights with comprehensive case studies on innovation among small-scale enterprises in developing countries, paying particular attention to technological change in clusters of small firms.The authors deliberately use a broad definition of innovation in order to emphasise the fact that technological change and innovation adoption takes place on a wider scale and in a greater number of forms than is frequently assumed. The unusual case studies such as the Kenyan food processing sector, furniture making in Nicaragua and tile manufacturing in Indonesia highlight the patterns of innovation adoption and diffusion, and serve as a unique and fascinating backdrop to the study. The authors pay specific attention to innovation by small enterprises in times of economic crisis and go on to assess the mechanisms employed to promote innovation. They demonstrate that although radical innovation among small enterprises occurs on a limited scale, innovation through gradual incremental improvements in production processes and products is continuous. Innovation and Small Enterprises in the Third World will be widely read by academics, researchers and policymakers concerned with innovation adoption and diffusion, and third world development issues.