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The purpose of this paper is to analyze the adequacy of public policies that support innovation in small businesses in a swinging economy, particularly in Brazil.1 In order to make our case for more adequate public policies on innovation, we develop five propositions based on the assumption that innovation policies focused on fostering socioeconomic development should meet. We adopted a documentary research design, as we examined the policies produced by governmental bodies and agencies at the three governmental levels in Brazil - federation, states, and cities. Also, qualitative content analysis was performed in order to organize, codify and interpret the messages delivered by current innovation policies in the country. We found that most public policies on innovation and small businesses are short-sighted and generalist, borrowing metrics and evaluation criteria from the big enterprise context in an one-size-fits-all manner that, ultimately, cannot be applied to most small businesses and local contexts. As a contribution to theory, our five propositions could be used as starting points for future policy and administration research. On a practical level, we propose recommendations to policy-makers and offer insights on how an adequate policy affects a country’s competitiveness and socioeconomic development.
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