provide the bulk of employment However, opportunities presented by the globalization and the entwined, simultaneous pressure to
The project â€oeris-Hamburg†was initiated by the State Ministry of Economic and Labour Affairs in Hamburg and co-financed by the European union (EU). The findings of this survey are
3. 3. 1 Shortage of Skilled Labour...16 3. 3. 2 Financial Problems and State Support...
4. 1. 1 Quantitative Availability of Skilled Labour...19 4. 1. 2 Reducing Bottlenecks in Product Pipeline...
4. 2. 1 Cheaper Costs for (Skilled) Labour...21 4. 2. 2 State-induced Incentives...
and provide the bulk of employment Innovative ideas and products are becoming increasingly important to counter the price
-demographic factors, e g. shortage of skilled labour, in many industrialized countries This paper presents the findings of a survey by the authors carried out in the Metropolitan
Economic and Labour Affairs in Hamburg and co-financed by the European union (EU The findings of this survey are matched here against perceived opportunities and
that employ less than 500 workers and whose annual turn over does exceed not 50 million euros (Ifm, 2007a
unless specified otherwise †works with the EC definition primarily since this definition has been adopted by most of the member countries of the EU including Germany thereby
sales and employ hundreds of thousands of workers, SMES are equipped per definition with much lesser resources.
employment to 70.9%of all employed persons in 2006 (Ifm, 2007b. In absolute terms German SMES provided employment and/or apprenticeship to 20.42 million people in 2006
in the country. Nearly 83%of all apprenticeship placements in 2006 were offered by SMES, which amounted to 1. 36 million (Ifm, 2007b
Recent calculations by the authors of this paper, based on Germany†s official â€oestatistics portal†data, show that the high percentage of SMES amongst all enterprises continues to
As on 31.12.2006 large firms (with 250 employees or more) constituted a miniscule 0. 33%of all enterprises.
date an overwhelming 3, 204,519 were SMES (with less than 250 employees. 2 These data exemplarily demonstrate the key-role which SMES play in Germany†s economy.
and the overall employment generated SMES in Germany continue to remain week on the revenue front
member countries SMES usually operate under high overhead costs, such as labour costs and find themselves faced with tough price-oriented competition from low-cost producers
1 Ifm Bonn works with a definition of SMES that differs from the official definition
According to the specifications of the State Ministry of Economic and Labour Affairs â€oebehã rde fã r Wirtschaft und Arbeitâ€) in Hamburg,
managers and promotions via diverse online intermediaries, e g. newsletters of industry associations Despite multiple promotions and reminding activities only 131 respondents filled out the
questionnaire, out of which the answers of only 70 could be analyzed. The rest was rejected because of containing incomplete and/or contradictory data.
confirm, or extend the data base with experts from the selected industries like firm representatives, representatives of industry associations and cluster
3. 2. 1. 2 Availability of Skilled Labour Another major hurdle faced by the survey respondents related to the difficulty in finding
However, experienced skilled labour was generally difficult to find 71%71 %21 %36 %14%7
With work experience Freshers n=33 Figure 6: Lack of Qualified Human resources as Barrier to Innovation
BARRIERS TO INNOVATION IN SMES CAN THE INTERNATIONALIZATION OF R&d MITIGATE THEIR EFFECTS R. Tiwari and S. Buse (October 2007) Page 12 of 31
substantial unemployment with an unemployment rate of nearly 9%.At the same time the industry is unable to fill vacant positions with skilled labour.
Moreover, this problem may be expected to worsen further due to the aging population and the relatively low birth-rate in
can have a look at â€oerestrictive†labour laws in Germany, which according to a Mckinsey study cause many firms not to hire
desire to reduce costs by getting access to cheaper labour. Supposedly â€oeunfavourable†regulatory conditions at home also did not play any worthwhile role in the decision to go
3. 3. 1 Shortage of Skilled Labour Firms not only in Germany but in many other Western countries are faced with scarcity of
skilled labour owing primarily to two reasons a) Demographic developments (â€oeaging populationâ€)( see Reinberg & Hummel, 2004
In Germany alone firms are facing a severe crunch of skilled labour, despite high rates of
unemployment in certain sections of the society. According to some preliminary calculations the shortage of skilled (technical) labour, primarily of engineers and scientists
is leading to a loss of over 20 billion euros a year in the form of unrealized business
47,998 engineer job vacancies in 2006 resulting in a loss of 3. 5 billion euros (Koppel 2007
SMES with a staff of 50 to 249 employees were found to be suffering more from this scarcity (60%)than did large firms
40%)(BITKOM, 2007b According to a recent â€oeinnovation Report†by DIHK which is based on over 10,000
interviews with firm representatives, recruiting skilled technical labour is increasingly becoming a grave problem (DIHK, 2007.
while the official labour mediation agency Bundesagentur fã r Arbeit confirms this trend (Dunkel & KÃ hnlenz, 2007;
assumption that till then there will be no change in the employment basis. In case the employment basis increases by 2. 5%in this period, the shortfall would grow to 492,000 (of
which 95,000 engineers. In case of a decrease by 2. 5%the shortfall would still be to the
labour than large firms, owing to various reasons, e g. attractive brand names or access to
b) Finding qualified, suitable human resources c) Finding suitable cooperation partners with knowledge resources d)( International) Marketing of innovative products
of qualified human resources in science and technology, cheaper labour costs and access to new, fast growing consumer markets with substantial purchasing power and/or
2006), suggest that seeking â€oeaccess to know-how†(e g. in the form of skilled labour
4. 1. 1 Quantitative Availability of Skilled Labour The demographically disadvantageous factor of an aging population in many Western
university graduates (with seven years or less of work experience) India†s talent pool is
3 DBR (2005), citing India†s Department of Industrial Policy and Promotion, puts the no. of India†s graduating
Inc. cited troubles in obtaining work visas for its prospective employees as a reason to set
Global innovation activities may ensure that work can be carried out simultaneously from multiple locations and on multiple projects, if needed.
addition to access to skilled labour, may also contribute to reducing costs of innovation 4. 2. 1 Cheaper Costs for (Skilled) Labour
Global activities, particularly in emerging countries, may lead to significant reduction in the costs (EIU, 2004.
The labour costs are however going up, see section 5. 2 4. 2. 2 State-induced Incentives
Even China and India are reportedly experiencing shortage of skilled labour with international knowledge standards;
in many respects, for instance, wages of highly skilled labour in India reportedly grow by 10 to 15%and above per annum on average;
) Wage costs for semiskilled or unskilled labour, however, remain significantly lower than in Western, industrialized nations
several incidences of intercultural nuisances in Indo-German software development work Fabian and Schmidli (2005) report similar problems in Sino-Swiss projects
The parent unit (headquarters) tend to interfere in the innovation work being carried out at the foreign location,
Furthermore, some employees in the R&d units at the headquarters tend to see the new
location as a potential threat to their job security leading to resentments, antagonism and even non-cooperation,
and should provide their employees involved in international activities with cross-cultural training. This sensitization to
senior management but also by other employees, especially in R&d departments, as well as a profound analysis of business environment conditions of the target offshore country
Distributed work, Indian Institute of Management, Bangalore, pp. 451-465 TRAI (2007: Telephone subscriber maintains growth:
creating a more dynamic economy and greater employment opportunities. In fact, the national climate for private sector innovation has an impact on businesses of
Others maintained that governments should be prepared to work directly with SMES, offering special financing arrangements including state guarantees and/or tax
•Liberalise the hiring of qualified foreign workers •Enhance co-operation between schools, entrepreneurs and branch organisations
•Harmonise vocational training system with innovations and technological change Inadequate access to technological know-how •Foster links between enterprises and research centres
financial and human resources. Similarly, Rosenbusch et al 2011) have identified several factors that affect the relationship between innovation and SME performance.
members while they carry out their work and goals Innovation is considered as every day issue for members of
and encourage the employees to participate not only in innovation and learning activities but also be a part of
that innovation is seen as rising trend in day to day work of organizational members and on individual level the
employees not exceeding 150 full time employees. The instrument of the study was based on the innovation (process
training their employees in this regard. The results indicate that on all accounts SMES surveyed were involved less in
R&d activities except for the training of employees V. CONCLUSION The present study was conducted to find out the role of
of their employees through various trainings. The results also suggest that the manufacturing companies are involved more
Creating sustainable work systems. Developing social sustainability. Routledge. UK 17 Kianto, A. 2008. Development and validation of a
behavior in the workplace: The role of performance and image outcome expectations. Academy ofmanagement Journal.
Work Programme 7 Links COSME (EU Programme for the Competitiveness of Small and Medium-sized Enterprises 4
WORK PROGRAMME 2014 †2015 7. Innovation in small and medium-sized enterprises Revised This Work Programme was adopted on 10 december 2013.
The parts that relate to 2015 topics, dates, budget) have revised, with this version, been updated. The changes
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and achieving the employment and growth targets of the Europe 2020 strategy requires a competitive industry that builds its competitiveness on innovation in
While certain Work Programme parts and areas have been identified explicitly as participating in the Pilot on
HORIZON 2020 †WORK PROGRAMME 2014-2015 Innovation in SMES PART 7-Page 5 of 37
SME participation is encouraged throughout this work programme and in particular in the priorities Industrial Leadership and Societal Challenges
SME instrument are described in the respective parts of the work programme. A complete list of topics and indicative budgets are provided below
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HORIZON 2020 †WORK PROGRAMME 2014-2015 Innovation in SMES PART 7-Page 7 of 37
as access to the financial facilities supported under Access to Risk Finance of this work
demographic change and wellbeing work programme part 6 The commercialisation plan must demonstrate a credible path to the market also demonstrating the capacities
HORIZON 2020 †WORK PROGRAMME 2014-2015 Innovation in SMES PART 7-Page 8 of 37
management skills of individuals in the senior management team and developing in-house coaching capacity; developing a marketing strategy or raising external finance
terms (e g. on turnover, employment, market seize, IP management, sales, return on investment and profit
HORIZON 2020 †WORK PROGRAMME 2014-2015 Innovation in SMES PART 7-Page 9 of 37
General Annexes to the work programme, with the following exceptions Topic identifier Proposals for phase 1 are required not to provide a draft plan for
part H of the General Annexes to the work programme, with the following exceptions Topic identifier The criterion Impact will be evaluated first, then Excellence and
If any of the persons identified is an independent expert participating in the evaluation of the proposals for
HORIZON 2020 †WORK PROGRAMME 2014-2015 Innovation in SMES PART 7-Page 10 of 37
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which will provide the growth and employment of the future. The reindustrialisation of the EU's industrial base has to focus on the development
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materials and promotion to the demand and to better reach the target group. In particular, the development should follow the recommendations of the
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individuals frequently do not have the knowledge or human resources to effectively use and manage IPR.
legal consultants; 2. the professional consultants were prepared better to deal with SME specific challenges 3. cross-border information about IPR issues would be easily available on
the internet and 4. National Intellectual Property Offices (NIPOS) would provide better IPR services to SMES
HORIZON 2020 †WORK PROGRAMME 2014-2015 Innovation in SMES PART 7-Page 16 of 37
support SMES to contract universities, R&d service providers or private consultants to either conduct small innovation projects or to explore the feasibility of larger ones.
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See for example â€oemaking public support for innovation in the EU more effectiveâ€, Commission staff working document SEC (2009) 1197
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So far staff in innovation agencies has hardly skills to assist their clients to establish
HORIZON 2020 †WORK PROGRAMME 2014-2015 Innovation in SMES PART 7-Page 20 of 37
ï develop and test a qualification profile, curriculum and training courses for staff currently providing brokerage services in established networks or SME agencies
support agencies interested in enhancing the skills of their staff ï The efficiency of innovation support service provision-for example
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-Awareness raising regarding the recruitment opportunities for SME instrument coaching towards appropriately qualified individuals -Creation of information materials, setup of dissemination events, creation of on-line
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General Annexes to the work programme, with the following exceptions INNOSUP-1-2015 1. At least 75%of the total proposed budget shall be allocated to SMES
growth and job creation, and has the potential to act as a catalyst by contributing to and/or leveraging other activities supported, for instance
part H of the General Annexes to the work programme, with the following exceptions INNOSUP-1-2015
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suitable coaches and support their work that would address the recognised barriers to growth on the basis of a jointly agreed †coaching planâ€.
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The eligible costs of the action are restricted to the staff costs of the qualified staff members
rates of senior staff in the network projects in the country II. Service provision in 2015/16
are restricted to the staff costs of the qualified staff members and indirect costs at the standard
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to business consultants, and to develop the market for innovation management consulting by enhancing quality and quantity of supply the IMPÂ rove platform had initially been developed
stable environment with highly qualified staff The IMPÂ rove European Innovation Management Academy has the potential to assist the
First, by providing a capacity building environment for the innovation advisors (staff of Enterprise Europe Network) that work in regions with a weakly developed consulting base
and no own assessment and consulting tools; second by providing SMES (including beneficiaries of the SME instrument) access to an international innovation management
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business associations, for their work with the SMES as well as training material for SMES ï Demonstration of concrete cases, to business development organisations and managers
HORIZON 2020 †WORK PROGRAMME 2014-2015 Innovation in SMES PART 7-Page 32 of 37
their staff working with SME;(ii) for the work with SME and (iii) during the design of new
SME innovation support actions The activities will be divided in two lots Lot 1-Analysis and documentation of business innovation
HORIZON 2020 †WORK PROGRAMME 2014-2015 Innovation in SMES PART 7-Page 33 of 37
scientists and qualified workers in third countries To capture the growth opportunities notably in developing countries and emerging economies
This action will support the work of the Advisory Group â€oeinnovation in SMES€. The Group
various work programmes and activities. Activities financed will include, but will not be limited to, assessments,
HORIZON 2020 †WORK PROGRAMME 2014-2015 Innovation in SMES PART 7-Page 34 of 37
This action will support the use of appointed independent experts for the evaluation of project
The work of the expert group will be essential to get a better overview of the investment
The experts concerned will be qualified highly, with specialist expertise in the field of financial instruments such as bankers, venture capital (VC) and other risk-capital fund
attract experts of sufficiently high calibre, a special allowance of â 450/day will be paid to
to Risk Finance Work Programme), and should help ensure greater access to risk finance by
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Experts (expert evaluators, experts groups monitors 0. 92 of which 0. 10 from 02.040203 and 0. 82
Detailed budgets of the common call of the SME instrument is provided in the introduction of this work
programme part and in the budget tables of the individual work programme parts 27 The budget figures given in this table are rounded to two decimal places
HORIZON 2020 †WORK PROGRAMME 2014-2015 Innovation in SMES PART 7-Page 37 of 37
see Part 17 of the work programme 0. 06 of which half from 02.040203 and half
see Part 17 of the work programme 0. 03 of which half from 02.040203 and half
†to achieve the highest sustainable economic growth and employment and a rising standard of living in member countries, while maintaining financial
of the European communities takes part in the work of the OECD (Article 13 of the
Permission to reproduce a portion of this work for noncommercial purposes or classroom use should be obtained through the
emerged from preparatory work in the OECD Working Party for SMES and Entrepreneurship. The wide variation in stages of economic development, institutional
others relate to mobilising human resources, in particular women, to realise their full economic potential. 1 A second
1. This work is an important part of the follow-up to the OECD Â OECD 2004 7
such as those affecting labour markets, tax design competition, financial markets and bankruptcy laws. The  OECD 2004 9
Employment regulation which the World bank finds is generally more flexible in advanced countries than in developing economies, limits
and unemployment, including chronic unemployment, have been implemented in many countries. New enterprises can procure a range of benefits that contribute to local
rises in employment and incomes enhanced provision of services for consumers and businesses; and possibly, demonstration and motivational
local level include demographics, unemployment, wealth the educational and occupational profile of the workforce the prevalence of other small firms and infrastructure
competition, the regulatory framework, the tax system, labour markets, financial markets and bankruptcy laws should take account of the way these areas
â Integrate the local development dimension into the promotion of entre -preneurship. The roles of sub-national authorities in the promotion of
entrepreneurship are of paramount importance and should be defined and co -ordinated with central governments, as appropriate for each country
analytical work to be carried out. The issues that are involved are considered further below Fostering women†s entrepreneurship
recognised as an important source of employment and potential growth. Indeed, data are very scarce, but estimates
women provide employment for 9. 2 million people. Using the US ratio between number of employees and self
-employment, it is estimated that the self-employed women in surveyed European countries might employ around 15 million persons.
Indeed, self employment represents one of the most important job options for women, especially for women in developing economies.
Furthermore, as women behave differently from men, their entrepreneurship provides society with different, and often innovative
Figure 1. Female employers and own-account workers Percentage of total employers and own-account workers
Source: United nations Economic commission for europe, Gender Statistic Database %50 45 40 35 30 25 20 15 10
in the labour force, †An important area where progress can be made is in removing obstacles to female participation in the labour
force. Family-friendly policies, notably as regards child care parental leave arrangements and other child-related
financial support, can have a positive effect on women†s employment generally and entrepreneurial activities more
 OECD 2004 15 PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY 16 specifically. Such policies are part of the wider package of
â Increase the ability of women to participate in the labour force by ensuring the availability of affordable child care and equal treatment in the workplace.
More generally, improving the position of women in society and promoting entrepreneurship generally will have benefits in terms of women†s
development and promotion. Co-operation and partnerships between national and international networks can facilitate entrepreneurial endeavours by women
Regulations and supervisor arrangements designed to safeguard the soundness of financial systems can affect the
property rights and human resources. They must also participate in networks, particularly those that nurture the tacit knowledge and other non-tradable competences that are
business consultants to have a good understanding of the intellectual property system, including its strategic use by
forestry and fishing, government administration and defence, education, private households employing staff and religious organisations.
2. For Canada, 50-299 employees instead of 50-249 and 300 or more instead of 250 or more.
with 100 or more employees. For The netherlands, 50-199 employees instead of 50-249. For Switzerland
5-49 employees instead of 10-49 and 5 or more employees instead of 10 or more.
For Mexico, Businesses with 21 or more employees, 21-100 employees instead of 10-49,101-250 instead of 50-249,151-1000 instead
of 250 or more 3. Internet and other computer-mediated networks Source: OECD, ICT database and Eurostat, Community Survey on ICT usage in enterprises 2002, May 2003
human resources Lack of information and communications technology skills and e-business skills are widespread impediments to effective use of e-business processes once adoption
specialised staff, SMES must often rely on the qualifications and training of their general workforce. Governments have a
source of employment and generate significant domestic and export earnings. In the poorest countries they nevertheless
less to employment and output than the informal sector Figure 5). An important policy priority in low-income
healthy and flexibly skilled labour. SME development strategy must be integrated into the broader national  OECD 2004
Figure 5. Contributions to employment and output Source: M. Ayyagari, T. Beck and A. Demirgã c-Kunt, â€oesmall and Medium Enterprises across the Globeâ€, World
Employment Output (GDP Low income Middle income High income Income group Low income Middle income
promotion, led by the appropriate ministry, but which involves participation by all key stakeholders. The overall
also seek to integrate export support and promotion into a well developed and effective business support system
support needs of SMES are recognised fully as central to growth, employment and poverty reduction â Strengthen SME capacities to improve their competitiveness in domestic
Work to support whole of government approaches so that trade and investment policies and standard setting are aligned with development co-operation objectives and policies
A recurrent theme in the work summarised here is the need for systematic assessment and review of SME policies
Department of Work and Pensions 71 Local authorities 300 Tax agencies (support services) 81 Department for Environment, Food and Rural affairs
consultants or academics. Both these groups have the advantage of being less clearly subject to â€oecapture†and being
A second recurrent theme in the preparatory work for the Istanbul Conference has been the poor empirical basis
economies should be involved in this work where possible â Develop an integrated business statistical register. This requires that countries
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