The Impact of Network resource on Firm's product and process Innovation capability

Innovation forces exists in small and medium sized enterprises as well in large ones. Competitive advantages of SMEs against large enterprises are their flexibility and speed of response to innovation. Innovation is a social process and does not happen in isolation. Hence, inter-organizational relationships which can be managed, can improve innovation and leads to growth and survival. This paper is drawn on the notion of network resource which is resultingfrom membership or participation in inter-firmnetworks in order to access other organizations’ knowledge. The main object of this research is the investigation of network resource on firm‘s innovation capabilities. For this purpose, network resource with two dimensions: industrial and scientific network capital is investigated as an independent variable, Innovation capability with two dimensions (product innovation capability and process innovation capability) as a dependent variable. Descriptive correlation method is used in this study and the Measurement tool is a questionnaire which is tested betweenmanagers and experts from 158 high-tech SMEs in Tehran with random sampling. Pathanalysis with PLS software is used to analysis the data of this study. The results show that industrial network capital has influence on innovation capability