The relationship between product technology and innovation performance in high technology small firms

Abstract

This paper considers the relationship between product technology and the innovation and growth process in high technology small firms. With evidence from the biotechnology and the scientific instruments and electronics industries it is suggested that significant theoretical and practical differences may exist between industries that are generally termed ‘high technology’. Politicians and government planners eager to exploit the opportunities offered by emergent key technologies have almost reached a point where it is assumed that the encouragement of any new technology will result in rapid and sustained industrial growth. It is suggested, however, that the basic technologies of high technology industries significantly influence the ability of small firm entrepreneurs to found and expand new businesses, and therefore that variable strategies and rates of development between sectors will be observed. The paper concludes with a discussion of policy formulation which stresses that, while policies aimed at the encouragement of high technology small firm growth are warranted, they should be based on the acceptance that short-term growth rates will vary owing to sharply differing production technologies that might appear superficially similar. This implies that firms may have different requirements in terms of assistance from external agencies, and that a policy which treats all high technology firms as similar may be flawed.