SMEs In Europe Research Articles

The use and drivers of organisational eco-innovation in European SMEs

European SMEs are key contributors to economic growth and contamination. Driving eco-innovation (EI) within SMEs is crucial for achieving SDG goals, such as clean energy, economic growth, Industry & Innovation. This study examines the relationship between eco-innovation and organisational innovation among SMEs in Europe and differentiates between the determinants for SMEs and large enterprises. We employ binary logistic regression models with maximum likelihood applied to Eurostat’s CIS database categorised by company size. We analyse 8.094 companies spanning nine countries, focusing on environmental innovation activities by innovation type. Innovation in work responsibility and decision-making is the most conducive form of EI, with a significant effect observed among SMEs higher than large corporations. There are clear differences in drivers of organisational EI for SMEs versus large enterprises, revealing that some of the most cited determinants of EI, such as regulations or energy costs, are not relevant for SMEs.

Psychological minefields on sustainability road: it’s people, not knowledge that matters

Much of the knowledge about economic and environmental sustainability (EES) is couched in scientific and technical language and represented in complex diagrams of the knowledge flows in the process. The area is also a highly contested space. In addition, the role of individuals in decision-making about EES is downplayed with government overtures about sustainability directed to the corporate world. However, of the 23.1m SMEs in Europe, 21.6m employed fewer than nine people and their value-added part of the European economy was about €3.9 trillion. The 197m households in the EU had an average of 2.2 members. Individuals matter in decision-making about EES. While the UN’s Sustainable Development Goals are laudable, major obstacles in their implementation rest with the behaviour of individuals, e.g., the propensity of people to say one thing and do another and fail to put policy into practice. In this context, the article discusses Kurt Lewin’s “field theory” and reviews how cognitive dissonance and neuroscientific factors affect human behavior. The Circular Economy model of production and consumption illustrates how facilitating and inhibiting factors influence the implementation of its principles and practices. A review of the approaches and organizing principles used by one Higher Education Institution in delivering a subject underpinned with EES principles, demonstrates how obstacles on the road to sustainability can be overcome.

Achieving Global Convergence? Integrating disruptive technologies within evolving SME business models: A micro-level lens

This research responds to the call on global convergence in the international business management domain. Global convergence requires new evolutionary, devolutionary and even revolutionary strategies that are framed in the context of digital transformation. The digital transformation phenomenon has led to different theoretical and managerial perspectives on disruptive technologies provoking the need for more studies on the integration of such technologies within SMEs ecosystem-based business models (EBBMs). In this vein, by adopting a micro-level lens, this research examines 718 managers from SMEs in Europe who have already embraced the digital transformation process and have bonded physical and digital ecosystems. The results are analysed through the application of logistic regression analysis.A notable contribution of this study is the development of a new model which articulates the relationship between substantive capability, adaptation capability and change capability in the SME.The study articulates how these work, support and facilitate disruptive technology integration in EBBM and suggests a method for their evaluation. As emerged the consideration that DCs are not replicable is supported and so it has been shown that technologies cannot replace human beings in their transformation business capabilities. This addresses the evolutionary change of global convergence generated by disruptive technologies that: 1. empower individual skills; 2. develops renewed strategies for enhancing network capabilities and; 3. allows the exploring and exploiting of opportunities from the influence of EBBM.

Twin Green and Digital Innovation by SMEs in the Construction Sector

The Twin green and digital innovation is a fundamental element of the European SME Strategy and European Green Deal. While larger corporations have initiated a transition towards more sustainable and data-driven business, only a limited part of SMEs in Europe are actively investing in Twin innovation. Most SMEs presume elevated costs of Twin innovation and are unaware of the potential impact on their business performance. The study describes a usable generic framework to analyse the Twin innovation options, the impact on business performance and a roadmap for implementation by SMEs in the construction sector. The paper offers practical tools for SME owners and directors seeking to engage in Twin innovation. The findings are also relevant for other researchers in this field interested to gain a better understanding of twin innovation, as well as policy makers who seek to steer support programs towards innovation in SMEs.

Digitalization of SMEs – pilot study on status, reasoning, and perception in a developing economy

Abstract As digitalization in Europe is becoming more and more a priority, research has identified that there is a constantly existing gap between the European Union and the United States when it comes to the digitalization of enterprises. The situation is particularly obvious when it comes to the digitalization of small and medium enterprises. Published reports have noted that lack of access to financing is not seen as a debilitating factor, while developing economies in Europe, which the paper focuses on, do not report lack of infrastructure. As such, the paper produces, through a combined qualitative and quantitative pilot study, additional potential reasons for the lack of digitalization of SMEs in Europe which should be researched in the future: reactive mindset of waiting for growth in order to justify digitalization investments, lack of options for SMEs that do not necessarily desire to grow to large enterprises, and the lack of understanding of innovation and digitalization benefits for enterprises that do not have a culture for innovation.

The Turnover of e-Commerce of SMEs in Europe

The Turnover of e-Commerce of SMEs in Europe

China’s OFDI support mechanisms in Germany: how governments can work together to promote SME internationalization, reduce liability of foreignness and contribute positively to society

PurposeNested within institutional theory and the political economy perspective, this study aims to examine Chinese outward foreign direct investments (OFDI)-supporting organizations and fostering mechanisms for its SMEs in Europe’s largest economy, Germany.Design/methodology/approachThe authors conduct a multiple-case study to present rich insights from elite interviews with representatives of Chinese and German governmental organizations, intermediary parties and specialized OFDI consultants. In addition, the authors analyze secondary data such as presentations, websites, brochures, social media and recent Chinese OFDI policies for SMEs. The findings are triangulated by interviewing business owners and senior executives of seven Chinese SMEs that have invested in Germany.FindingsCooperating with Germany’s federal government, China’s ministries implemented an effective OFDI support network in Germany, which connects and benefits both economies. This includes Chinese governmental organizations, privately-held national champions, German–Chinese business associations and linked intermediary parties. These organizations support SMEs through four main mechanisms: networking and information, mutually beneficial knowledge transfer between innovation partners, lobbying for potential cooperation and an objective picture of Chinese OFDI and facilitating investment services.Originality/valueThis study advances OFDI theory and contributes to the growing discussion on the internationalization of Chinese SMEs by shedding light on China’s OFDI support organizations and mechanisms in the German market. The study also offers practical contributions. Understanding better how governments can spur internationalization is vital, as it determines the effectiveness of policymaking and fosters international mutual understanding, cultural exchange and firm growth and innovation (Ahlstrom, 2010), and hence ultimately contributes positively to society. Moreover, knowing the specific OFDI support organizations and measures China is currently adopting can serve as a helpful orientation for Chinese entrepreneurs who plan to invest in Germany.

Environmental innovation across SMEs in Europe

This paper focuses on the relation between business innovation modes and environmental innovation. Over time firms have recognized the importance of prioritizing innovation to gain competitive advantages in open markets. Yet, in more recent times with the more recent international agreements on environmental sustainability (rounds in Doha in 2004; Copenhagen in 2009; Paris in 2016; and Glasgow in 2021), innovation needs to be guided through new boundaries and requirements that individual businesses and the business system as a whole face. One of these boundaries is nature and its resources which require significant protection as part of the international priority agenda on climate change agreed by most countries with the 2016 Paris Agreement on the Environment and recently confirmed with COP26. As firms are found to adopt alternative archetypical strategies of innovation, some science-driven (STI innovation mode) and others practice-driven (DUI innovation mode), we investigate whether any of these strategic modes is beneficial in relation to the capacity of the firms to produce eco-innovations, and which one is more beneficial in relation to which type of eco-innovation (e.g. technological and non-technological innovation). This analysis is seen in relation to the size of the firms as SMEs typically rely on practice and interactive-based innovation activities (DUI mode). This may help design environment protection-orientated policies that focus on specific drivers, thus making policy action efficient and effective. The analysis is based on the Community Innovation Survey (CIS) database for European countries. Our findings support the view that both STI and DUI drivers support eco-innovation through technological nuances that work also in the specific case of SME environmental innovation.

Industry 4.0 as an Opportunity to Achieve Environmental Sustainability: The Difference between SMES and Large Companies

The decline of environmental sustainability is undoubtedly one of the biggest problems if not the most severe one that threatens our planet. In the last decade, to overcome this global issue, industries were regulated, events and conferences were organized, objectives have been made, but the high cost of green practices, the fierce competition among firms, and the massive increase rate of production made all these efforts insufficient, in the other hand, the fourth industrial revolution could potentially provide suitable solutions to achieve high environmental sustainability. The present research contributes to the environmental sustainability literature by studying the vision that companies in Europe have on Industry 4.0 and the main objectives that they want to achieve from this transformation. Furthermore, relying on a statistical study, the research identifies the differences between large companies and SMEs in Europe when it comes to the incorporation of environmental sustainability objectives within their Industry 4.0 strategies

Industry 4.0 — policy-based approaches to efficient implementation in SMEs

Abstract Industry 4.0 (I4.0), driven by the need to access real-time insights and information across the manufacturing process, creates a disruptive impact on industries. Large-scale machine-to-machine communication, virtual reality (VR), the Internet of Things (IoT), simulation technologies and network management are integrated for increased automation, machine learning, self-controlled social and technical systems (Smart Factories). The uptake of advanced manufacturing solutions represents a challenge for businesses and SMEs in particular. SMEs possess neither the organisational capability nor financial resources to systematically investigate the potential and risks of introducing Industry 4.0. However, the so-called Fourth Industrial Revolution is a matter of technology and cooperation between European regions to share knowledge concerning alternative regional and national approaches to reinforcing the I4.0 uptake. Therefore, this paper primarily aims to analyse practical experience on how European policies related to the European Regional Development Fund (ERDF) can unlock the full potential of Industry 4.0 and overcome the fragmentation of Industry 4.0 solutions. Case studies of successful transfer of I4.0 to SMEs in Europe and supporting regional policy instruments presented in the paper could inspire and enable the potential of digitalisation by dealing with main challenges hampering their diffusion into the business ecosystem.

Exploring Barriers and Opportunities for Digital Servitization in SME Manufacturing Firms

While many firms have captured benefits from increasing digitalization, few SMEs in Europe indicate that they are digital or have started a digital transformation. Some firms have used digital tools to extend their offerings in the product-service strategy of servitization. We reviewed existing literature on digitalization and servitization, clustering the barriers and opportunities that SMEs identified in their move to digitalization. Using focus groups of senior managers of diverse SMEs in a workshop setting, we conducted an empirical study of the perceptions of the main barriers and opportunities of digitalization and the types of services offered by these SMEs. Our results demonstrate the relationships between the barriers and opportunities that an SME identifies during its digitalization, the type of product-service it develops, and aspirations for future digitalization.

Firm specific determinants of open innovation in European SMEs

To manage the changing innovation landscape a key strategic decision for owner-managers of SMEs is the extent to which they adopt open innovation. Extant research however has tended to study open innovation processes in terms of a binary distinction- either open or closed. The purpose of this paper is to move beyond this dichotomous framing and identify the extent of openness in the innovation processes of SMEs in Europe. Furthermore, the study explores the association between internal firm-specific factors related to the capabilities and strategies of the firm and open innovation in SMEs. This study explores if (a) innovation objectives, (b) innovation activities, and (c) innovation expenditures, influence the extent of openness in the innovation process in SMEs. Drawing on data from the 6th Community Innovation Survey (CIS) of 9,949 SMEs from nine European countries, hypotheses are tested using hierarchical multiple regression analysis. The study contributes to the literature by showing that the extent of openness in the innovation process is low for European SMEs. SMEs are more likely to be characterised by higher levels of openness in their innovation if they prioritise product/process innovation objectives, conduct internal R&D, purchase/license external knowledge, and commitment more financial resources to innovation.

Corporate Liquidity and Solvency in Europe during COVID-19

The spread of COVID-19, containment measures, and general uncertainty led to a sharp reduction in activity in the first half of 2020. Europe was hit particularly hard—the economic contraction in 2020 is estimated to have been among the largest in the world—with potentially severe repercussions on its nonfinancial corporations. A wave of corporate bankruptcies would generate mass unemployment, and a loss of productive capacity and firm-specific human capital. With many SMEs in Europe relying primarily on the banking sector for external finance, stress in the corporate sector could easily translate into pressures in the banking system (Aiyar et al., forthcoming).

Corporate Liquidity and Solvency in Europe During COVID-19: The Role of Policies

The spread of COVID-19, containment measures, and general uncertainty led to a sharp reduction in activity in the first half of 2020. Europe was hit particularly hard—the economic contraction in 2020 is estimated to have been among the largest in the world—with potentially severe repercussions on its nonfinancial corporations. A wave of corporate bankruptcies would generate mass unemployment, and a loss of productive capacity and firm-specific human capital. With many SMEs in Europe relying primarily on the banking sector for external finance, stress in the corporate sector could easily translate into pressures in the banking system (Aiyar et al., forthcoming).

The Role of Managerial Skills in the Sustainable Development of SMEs in Mehedinti County, Romania

The ever-changing external environment and the challenges and signals transmitted by the European Single Market have greatly contributed to the dynamism of SMEs in Europe. From the privileged place held by the entrepreneur in SMEs, the present study aims to investigate the role of managerial skills in the sustainable development of small and medium enterprises, focused on self-awareness, emotional intelligence, and interpersonal skills of entrepreneurs. The investigation method consisted of the distribution of anonymous questionnaires to a representative sample of entrepreneurs, in the Mehedinți County, Romania. The collected data were centralized, processed, and assessed. The results of this analysis revealed, besides the emotional intelligence and interpersonal skills which have reached a suitable level, a low level of self-awareness. Therefore, this has been considered as a potential barrier towards sustainable development of SMEs in the analyzed region. However, the high level of emotional intelligence, accompanied by an increasing trend of interpersonal skills as the manager’s experience in working with people increases, is a strong argument for the sustainable development of SMEs. The study comes to support the public policies concerning small and medium-sized entities by using a model of managerial skills testing for applicants. In this way, an increase of the transparency of financing decision and the effectiveness of financial support are ensured.

European SMEs’ engagement in open innovation When the important thing is to win and not just to participate, what should innovation policy do?

This exploratory study proposes an original methodology to operationalize and signal SMEs’ engagement in challenging dimensions of implementing Open Innovation. We verify whether the European SME Instrument is achieving its goal of providing public funds to the best SMEs in Europe, the ‘EU Innovation Champions’. We test our methodology on a sample of SMEs operating in the digital sector. We found that the SMEs awarded the grants are less engaged in the challenging dimensions of Open Innovation than companies that did not receive any funding. This is contrary to the intended goals of the grants. We provide policy and methodological implications relevant for the design of better OI-informed policy and the more effective evaluation of companies participating in the SME Instrument.

Anti-microbial coatings could provide opportunities for SMEs in Europe

Anti-microbial coatings could provide opportunities for SMEs in Europe

Anti-microbial coatings could provide opportunities for SMEs in Europe

Anti-microbial coatings could provide opportunities for SMEs in Europe

Business value of Intellectual Property in Biotech SMEs: case studies of Lithuanian and Arizona’s (US) firms

The paper presents the limited quantitative and qualitative analysis of the biotechnology industries in Lithuania and Arizona (US) focusing on the role of intellectual property for the business income of the small and medium firms (SMEs). The paper also discussed theoretical aspects of the role of intellectual property in the biotech SMEs, presents empirical data on the SME intellectual property holding, employment and income data in Lithuania and Arizona based on the conducted case analysis. In depth analysis of the intellectual property, employment and revenue profile and correlations of the selected biotechnology firms are provided. Case analysis focused on patents, which are dominant and easy to study public form of intellectual property in biotechnology firms. Arizona biotechnology firms were found to especially capitalize on patents, even if the number of employees is small, while in Lithuania biotechnology firms appear to lack clear focus on on patents and instead have non-innovative intellectual property, such as trademarks. This trend is the strongest in the small firms (by the number of employees). Analysis suggests that business value of intellectual property is much higher in Arizona, and is not sufficiently ascertained in Lithuania. Analysis also shows that biotech SMEs in the US benefit from the patent focus and derive significant business value from patents, while the benefits of dispersed approach to intellectual property in Lithuania are uncertain. The authors suggest that biotech SMEs in Europe may benefit from focused patenting.

The Microeconomic Impact on Growth of SMEs When the Access to Finance Widens: Evidence from Internet & High-tech Industry

The paper studies the impact on growth of SMEs in Europe when the access to finance increases, and the respective correlation between credit evaluation and accounting ratios. The research supporting the findings involved a sample of 1327 enterprises, and will be conducted by a multiple regression econometric model. The aim of this analysis is to identify the relationship between growth, solvency, and liquidity accounting ratios. The expected outcome of this paper is that growth of SMEs is strongly dependent on the financial access. Furthermore the author addresses the governmental decision makers with recommendations to ease the access to finance.