Transnational technology transfer of SMEs and its impact on regional development

Abstract

Innovatory activities and the innovatory capacity of enterprises are key factors for entrepreneurial competitiveness especially in the context of internationalization. Transnational technology transfer can have a positive impact on the technological capability of enterprises in the host country and on regional economic development. The role of small and medium-sized enterprises (SMEs) has remained obscure in this context. Against this background, the empirical research undertaken by the present authors intends to clarify the role of German SMEs in the context of internationalization with regard to transnational technology transfer and its impact on home and host countries on an empirical basis. Therefore, a representative postal survey of German SMEs in selected industries was sent out (8% random sample) and complementary interviews with matched-pairs of SMEs were conducted. The empirical results indicate that the success of an internationalization strategy depends on the methods of strategic orientation. Most internationalized enterprises are specialized in certain products with a specific know-how. Against this background, internationalization normally takes place with capital intensive forms in important markets. Subsidiary firms, affiliates or branch plants are set up that remain in control of the investing German company. These forms of internationalization are chosen by enterprises that want to assure that specific know-how, as being a critical determinant for their competitiveness, is not transferred to third parties. The regional impact of such a transfer is of little relevance as the partners are not integrated into the regional networks. Theories currently discussed in this context do not address transnational technology transfer and its regional impact sufficiently.