Forschungs- & Entwicklungsinformationsdienst der Gemeinschaft - CORDIS

Technology and infrastructures policy in the knowledge-based economy - Shifting from R&D to competencies: The specific problems of small and medium-sized enterprises

The study by Muller/Zenker comes to the following conclusions: Compared to large manufacturers, small and medium-sized enterprises are characterised by a lower level of knowledge-intensive interactions. This means mainly that SMEs acquire less innovation-related information from competitors, suppliers and also from research institutes and thus have more limited access to external knowledge than large firms. This has two consequences: First SMEs have less knowledge they can use for innovation projects and second SMEs benefit from fewer opportunities to improve their absorptive capacities.

These aspects and the lack of personnel, especially marketing personnel, are the major obstacles to innovation in comparison with large manufacturing firms. Since SMEs carry out R&D on an incidental basis while large manufacturing firms are permanently engaged in development activities, they have to a lesser extent the opportunity to codify the knowledge produced in the frame of these activities. Thus, through the development of routines, it can be assumed that large firms may codify their knowledge more easily and that therefore SMEs, in comparison, benefit only from a lower level of codified knowledge. Therefore the strategic aims for policy to achieve with regard to the situation of SMEs are: to raise awareness for the significance of knowledge and learning and to compensate knowledge codification weaknesses.

One important measure to raise awareness concerning the issues of knowledge codification and innovation issues in general consists in providing manufacturing firms with information on innovation projects and on the importance of knowledge. This also includes the introduction of routines such as knowledge monitoring tools in the firm, comprising organisational, technical, financial and human factors. In order to distinguish their competencies, firms must define their specific strengths and consequently the contents of their knowledge bases. This is an important process, which requires in-depth insights concerning firm activities and equipment with capital goods and with staff. Firms must then find a way to organise their knowledge flows and to manage their knowledge base. This is supported by available tools such as computer networks or specific software tools, and requires a certain technical standard. All these mentioned aspects mainly refer to codified knowledge and rather to technical than to social or organisational knowledge.

Knowledge monitoring forces firms to trace their innovation activities which allows for a better understanding of innovation processes and the respective (knowledge) inputs in different stages of the innovation process. Besides, this kind of self-monitoring forces firms to define and formulate their problems in innovation matters which serves as very important first step to solution finding and problem solving. On the other hand, firms should monitor their competencies, their skills and knowledge they can refer to. This might include codified knowledge that is stored in databases, containing information about available literature, brochures, internet web sites and further information, descriptions and comments about former experiences in innovation projects and specific skills of the staff. Especially the later aspect is difficult to achieve, but is crucial in order for a firm to use its opportunities and strengths optimally. Another important additional effect is the codification of knowledge internal to the firm that did not exist in codified form before: once a monitoring tool has been introduced and is maintained within the firm, firms codify at least parts of their internal knowledge in order to store it and use it for innovation projects.

Policy measures in this respect would include incentives and project support in introducing routines of knowledge monitoring in small and medium-sized firms that may lack own (financial) capacities to purchase equipment and to train their employees. Innovation policy should also support "knowledge managers", i.e. persons that visit firms and raise firms' awareness for the importance of those knowledge subjects. Additionally, the development of - at least partly - standardised knowledge monitoring tools would be helpful for firms, since the "barrier" for each firm to develop their own measurement tools is high. Besides organisational skills and respective personnel this also highlights technical skills and experiences that are important for performing research and development activities, for preparing and realising innovative projects and for the absorptive capacity of firms.

Recent studies mention the phenomenon of "innovation without research" emphasising firm networks as knowledge source. That is, individual firms are to a lesser extent seen as research performers as pre-requisite for internal innovations, but the innovation networks in which firms act and interact are emphasised. Nevertheless, a "non-researching, but innovating" firm has to acquire external knowledge and apply it to its individual problems, which implies that a firm has a knowledge appropriating capacity. In this context, the absorptive capacity of firm employees, i.e. the capacity to "know-what", to get familiar with external knowledge and to apply it internally is of crucial importance. Since a certain level of skills and knowledge is necessary to acquire new knowledge, the skill levels of firms' employees are referred to. Thus, political measures should increasingly include support for fostering skill levels in firms, for a qualified human capital in firms and for human capital mobility, for instance by exchange programmes with research organisations.

Reported by

University Louis Pasteur
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Evaluation - Policies
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