From new forms of massively parallel computing to the next generation of mini-satellites, countless innovations critical to future aerospace and defense systems will emerge not from the multibillion-dollar prime contractors, but from small technology companies worldwide.

These prototypically entrepreneurial enterprises number in the thousands and represent an astounding array of engineering disciplines. Many of them are comparatively miniscule, operating in the shadows of the major systems integrators, with less than $10 million in revenue and a staff of 20-30. Others are much larger, with hundreds of employees and several hundred million in revenues.

Common to all are a wealth of specialized skills, cutting-edge intellectual property, highly educated workforces, relationships with government officials and large aerospace customers, and in many cases, valuable security clearances.

Innovation is about change and moving forward, and all of these companies have a passion for improving upon, or changing the status quo—whether it is creating something that performs better and offers lower life-cycle costs, or carving out an entirely new market. Some are led by individuals with a vision for disruptive change; most are run by inspired leaders focused mainly on incremental but significant advances to existing products and processes.

“Small companies are an incredibly rich source of innovation,” says Charles W. Wessner, director of Technology, Innovation and Entrepreneurship at the National Academy of Sciences. “That is where big technology companies come from, and that is where the big companies go for innovative ideas.”

It is not as though the giants are not innovating, observes Tony Tether, former director of the Defense Advanced Research Projects Agency (Darpa), one of the most prolific wellsprings of innovation anywhere on the planet. “They most certainly are. But given a choice between funding a Boeing or a small entrepreneurial supplier, I would be inclined to fund the small company, because they must transition the technology [to market] in order to survive. That is a powerful incentive.”

It is indeed, and aerospace has the good fortune to be populated with myriad such companies keenly aware of that imperative, each one as different in their DNA as the individuals who comprise their brain trusts. They can be found across the industry, persevering to one degree or another against tremendous challenges to sustain profitable growth.

Resources, government regulations, access to capital and getting prospective customers to take notice of what they have to offer are some of the main hurdles. Then there is the daunting challenge of competing against the large first- and second-tier integrators once small suppliers achieve a certain critical mass. Thus, industry consolidation plays a very important role in the evolution of small, innovative businesses.

While smaller companies do not have an easy road, it may well be the most satisfying within the broader supply chain, considering the opportunities they have to develop new technological solutions to problems and the disproportionate impact they could have in any number of fields. That is especially true in fragmented, technically dynamic and rapidly growing markets in which there are low barriers to entry. It is in the third tier—component and small subsystem development—where smaller companies usually flourish.

“These enterprises generally are more agile and able to adapt to changes in market conditions much quicker than large corporations,” Wessner notes. “And they are committed to driving ideas forward. That is key.”

To capture the unique and indispensable role small companies play in the innovation process, a team of Aviation Week editors cast a wide net for such organizations representative of the thousands like them globally. Many of the ones profiled here were recommended by third-party centers of research and innovation, while others were selected on the basis of Aviation Week's own first-hand knowledge gained from past reporting on aerospace technology.

The industry snapshots that follow describe the companies' approaches to sustaining a culture of innovation and how they encourage new ideas. You also will read about examples of innovations they pioneered or introduced, and some of their signature products and processes.

Some of these suppliers will evolve into much larger concerns, while others will remain relatively small as they continue to engage in serial innovation. Many will wind up being acquired by much larger companies seeking to fill gaps in their technology portfolios.

Regardless of what their futures hold, they represent not so much a disparate collection of individual businesses as the bedrock on which past progress stands, future advances will be built, and innovation and entrepreneurship thrive. Without small companies, aerospace technology would not be where it is today any more than consumer information technology would be where it is without the likes of innovative giants such as Apple, Google and Microsoft—all of which began as fledgling enterprises and dreams.

Small companies are a vibrant source of innovation and value-creation across the aerospace industry worldwide. To see an interactive map showing locations and details about the ones profiled here, check out the digital edition of AW&ST on leading tablets and smartphones, or visit AviationWeek.com/innovation