Promoting SME R&D and Innovation

By Hiroyuki Okamuro, Junichi Nishimura, Massimo Colombo, and Erik Stam


SMEs are subject to constraints in internal resources including capital, human resources and knowledge due to small size. Moreover, access to external resources is limited as well due to market failures. Thus, SMEs have disadvantages in R&D and innovation compared to larger firms. In order to overcome these gaps with large firms, various public policies have been implemented including financial, networking, and IPR support programs. We discuss the effectiveness of these policies based on empirical evidence and propose a better policy framework for SME’s R&D and innovation with special attention to networking and IPR support programs.