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Eva J.B. Jørgensen and Line Mathisen

In this study, we argue that speed of innovation is important for small and medium-sized enterprises (SMEs) in rural contexts because their location often restricts economies of scale and competing on price of delivery. We study speed of innovation with an emphasis on proximity between external actors and the firm. We use a qualitative single-case study approach to investigate the innovation process in a manufacturing SME within the plastic industry located in northern Norway. We investigate the speed in the development phase and the launching phase through retrospective informant stories. Our main findings are that dimensions, degree, and dynamics of proximity in relationships to external actors influence speed of innovation. For SMEs in rural contexts, geographical proximity varies across the different phases and actors, and is a foundation for the development of social and cognitive proximity. In addition, we found that social proximity is important to implement the opportunity potential in terms of cognitive proximity.