This study uses the qualitative approach and the multi-case study method to analyze the influence that the competitive advantages exerts in the innovation given the specific context of the research. Among the main results are the mains factors that generate innovative practices in the researched companies are quality, flexibility, delivery and cost, in this order of importance, as generators of innovation practices in the surveyed companies. The quality and flexibility were related to technological product and process innovations. In the non-technological innovations, quality influenced the marketing and organizational innovations. Flexibility generated marketing innovations and cost and delivery generated organizational innovation. The results of this research can make it easy to redirect future public innovation policies in small businesses. We discovered that innovation does not occur only through the acquisitions and heavy investments in technology. The strategic reorganization of the decision-taking processes can contribute to innovation.