This paper considers the current situation within Australian manufacturing SMEs and their approaches to innovation and international competitive advantage. Using the viewpoint and language of complexity theory, we consider the variety of possibilities available to SMEs in this area. We then consider a particular international project on Discontinuous Innovation, how this has been deployed in Europe and Australia and the knowledge gained from our interactions with Australian SMEs to date around this project. Finally we consider the general development of a “Learning Laboratory” approach to working with SMEs and the differences required to make such approach successful in Europe and in different settings in Australia.<br /
