The selection of technological sources in Chinese SMEs

Abstract

To face the challenges of the current intense competitive environment, small- middle enterprises (SMEs) have to build and/or obtain competitive advantages such as highly differentiated, improved quality, increased dependability, or lower cost products and services through the selection of technological sources. This paper develops a basic framework of STS, which describes the interaction of technology classification, technology competence, and STS. An empirical test of 148 Chinese SMEs shows that TCO and TCL are key factors of the factors impacted on STS, and III need a relatively higher level of TCO while OA and CRD do not demand firm with a higher level of TCO. Moreover, OA is closely related with the level of TCL, but not very relevant with TCO; and in today's turbulent and changeful environment, OA and CRD has become an important channel of technology sources. Based on the characteristics of SMEs which are relatively lower levels of TCO and the three technological sources' different requirement on the quality of the firms in today's turbulent environment, we argue, SMEs in China is very likely to obtain competitive advantages by purchasing outside technology or collaborated R&D.