Abstract
Small and medium enterprises (SMEs) in Korea play a pivotal role in the national economy. However, due to scale limitations, the resources available to SMEs for innovation activities are limited. Therefore, as a means to compensate for the market failure of SMEs, which can be caused by resource limitations, and to ensure sustainable growth, the government supports the SMEs for innovation activities. Korea has fulfilled SME R&D planning support projects since 2002 to efficiently support SMEs’ technology commercialization activities through systematic support in the early stages of the technology commercialization cycle. In order to analyze the effectiveness of SME R&D planning support program, this study conducted latent growth modeling analysis using financial data of three years of SMEs participating in the program. According to the analysis results, SMEs receiving R&D planning support funds have an increase in sales compared to those that do not. In particular, it was analyzed that the sales increase effect of companies supported by R&D funds continuously appeared more clearly. The result of this analysis is that policy support for SMEs can help technological innovation activities necessary for R&D planning, which is an early stage of SME technological innovation. This study is meaningful in that it quantitatively analyzes using latent growth model and the contribution of government support at the R&D planning stage to SMEs’ innovation capabilities and their contribution to performance. However, it has a limitation that it does not address the specific impact path of the planning stage support on innovation capacity and innovation performance.
Highlights
Innovation is a sustainable process that identifies and captures opportunities in a constantly changing business environment
Under the RBV perspective, the policy underpinning the sustainable growth of SMEs is emphasized as a means to compensate for the lack of resources needed for innovation [10]
For the sustainable growth of SMEs, systematic R&D planning based on resources and information is required
Summary
Innovation is a sustainable process that identifies and captures opportunities in a constantly changing business environment. Measuring activities and performances that affect innovation is very important in terms of organizational management for innovation [1,2,3]. In addition to SMEs’ own innovation activities and efforts, the innovation process includes allocating and streamlining the resources required for the process through policy support. Under the RBV (resource-based view) perspective, the policy underpinning the sustainable growth of SMEs is emphasized as a means to compensate for the lack of resources needed for innovation [10]. R&D planning is a process by which companies acquire technology for innovation, allocate resources to produce products, and formulate strategies to approach the market systematically. For the sustainable growth of SMEs, systematic R&D planning based on resources and information is required
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