This paper examines the determinants of innovation in Spanish microenterprises. The influences of environmental factors in big companies have been widely studied in research. The results of a sample ...of 148 firms with less than 10 employees seem to conclude that the influences of these environmental factors loose power in explaining the decision to innovate in small business. On the other hand, internal factors associated with the micro entrepreneur's profile and cultural aspects appear to influence and explain the decision to innovate in small business. These internal factors seem to be actions of social responsibility, financial aspects, and organizational variables, such as companies' collaborations and diversification. In addition, this work proposes a series of recommendations for these entrepreneurs to survive and better compete in today's environment. Furthermore the conclusions include a guide of proposed good practices which will positively influence innovation and modernization of the company. PUBLICATION ABSTRACT
