Given the increasing complexity of the business environment, which has a considerable impact on Micro and Small Enterprises (MSE), innovation becomes the key to creating and maintaining competitive advantages, generating positive results for both companies involved in the process of innovation, and for the economy as a whole. The present research had as objectives to verify how the innovation presents itself in the MSE of the State of Piauí, to identify the determinants of innovation for the MSE of the interior and of the capital. In addition, it was intended to verify if there was an association between the geographical location and the innovation. For this, the study was based on a sample of 617 MSE distributed in six cities of the State of Piauí. The data were collected through the application of the Innovation Radar conducted by the Brazilian Micro and Small Business Support Service’s Local Innovation Agents program. Statistical techniques of descriptive, exploratory and multivariate nature were applied. The results showed that the MSE under studied has a capacity for innovation between “Little Innovative” and “Occasional Innovative”, and that the found innovation factors suggest the innovation is market driven rather than geographically as is commonly found in the literature on the subject.
