ie Number of employees of the firm xe Maximum number of employees (according to SME definition
if Sales (or Turnover ic3 Total costs of production ip Profit margin ic1 Initial investment capital
Firstly, my special gratitude goes to my supervisor Magnus Klofsten. He has been of great help
1 SMES are defined as firms with less than 250 employees (NUTEK 2004, p. 15 14 performance of SMES with a central focus on innovation capacity are limited (Siqueira and
and employee turnover, which are expressed differently in the intended model than the existing ones The existing models are complex tools
the number of employees, the maximum number of employees distinguishing the different categories of enterprises, firm age,
number of employees or the amount of turnover. It is a misleading term, however, due to the
consultants, and individual researchers. The second group consists of individuals who hold key-positions and deal with SME performance issues in relation to the firms†external
evidence shows that countries with higher R&d activities per employee have higher levels of total factor productivity growth (Coe and Helpman 1995.
numbers of employees have a higher survival probability (Mansfield 1962 According to Caves (1998), firm failure rates decline with size, given age.
significance of the human relationship in the organization and how the employees are related 44 to the functions of the firm.
According to Taylor†s (1911) approach, each worker is specially trained to perform a single movement or subtask in the manufacturing process.
) In the manufacturing sectors, SMES tend to have greater numbers of employees, while in consultancy and other service sectors;
SMES tend to have fewer employees. An alternative approach is to talk about smaller firms and larger firms in a relative sense;
the number of employees, to the average size of firms in the sector at that point in time.
The first two of these parameters are the number of employees and the firm†s age.
maximum number of employees distinguishing the different categories of enterprises (for the firm size parameter) and the
250 employees; the data was taken directly from the accounting reports of the firm and the analysis
250 employees; the data was delivered from the firm management for the period of the analysis;
as it had less than 250 employees 60 and the data was taken directly from the accounting reports of the firm for the period of the
as it had less than 250 employees; the data was delivered from the firm†s management for the period of the analysis;
employees. The analysis covered two fiscal years, 1999†2000 and 2000†2001. In comparison to the existing models,
We used a maximum limit of 50 employees to define a â€oesmall firm†in the case
force range of 49†90 employees through the years Summary of paper 7 This paper is a case study wherein the model is implemented, with the innovation
employees. The analysis covered two years, 1999†2000 and 2000†2001. Compared to the existing models,
the number of employees, the maximum number of employees distinguishing the different categories of enterprise, firm age,
for costs of material and other accessories as well as costs of manpower involved in developing new products and services at the firm.
The functions of the executive. Cambridge, Massachusetts: Harvard University Press Baum, J. A c. 1998. Disciplinary roots of strategic management.
prepared for the OECD Directorate for Social affairs, Manpower and Education†GERI. (IUI w. p. 350b, Stockholm
worker than others? Quarterly Journal of Economics 114 (1), 83†116 Hannan, M. T. and Freeman, J. 1977.
morale among railroad workers. Ann arbor, Michigan: Institute for Social Research University of Michigan Katz, J. A.,Safranski, S. R. and Khan, O. 2003.
Management and the worker. Cambridge Massachusetts: Harvard university Press Romano, C a. 1999. Identifying factors which influence product innovation:
labour market (Le Bas, 1995. This process is therefore uncertain, although not entirely so The firm acts as an interface between these elements, mediating
Experts for thematic capitalisation on the innovation capacity of SMES Year 1 Eurico Neves †inova-Portugal
He is one of the most experienced European experts in research exploitation and innovation policy, both at the regional and national level
SÃ verine Ouvry is an expert in innovation. Her background as a researcher in the United states, where
She joined inno as a consultant in economic development and policy evaluation http://www. inno-group. com
The programme therefore asked 12 teams of experts covering 12 different fields of policy to analyse the
of only 1 employee) to large companies employing several hundred people and with a turnover of millions of Euros †basically only excluding multinational companies or large
employees and an annual turnover below â 10 Million, and medium-sized companies as those with fewer than 250 employees and an annual turnover below 50 million.
The same recommendation defines micro-companies as those with fewer than 10 employees and a turnover below â 2 million
In this report, and as the assessment is on behalf of and for regional policymakers (the programme partners) and for the final beneficiaries (SMES), we have followed the
the Knowledge for Growth Expert Group advising the then Commissioner for Research, Janez Potoä nik
•Improve the capacities of employees in SMES for RTD and innovation management through training and the support of experts
•Weaknesses in networking •Lack of internal research capabilities •Insufficient marketing of innovation
than 250 employees in which †access to finance†was ranked the second most pressing problem
providers or private consultants), in a small-scale approach targeted to the needs of individual companies.
Supervisor, and eight students for seven weeks This GP has a lot in common with †Summer Entrepreneur†(also a GP from MINI
o I-CREO, brings an expert within each SMES€ network to seek new business opportunities
through the hiring of innovation experts in order to seek, propose and bring new business opportunities to fruition, including in export markets.
experts for each of the main industrial sectors of the Valencia Region. The function of the
provided via the network of IVEX delegations abroad and in Spain and experts in international
Fabrica Ethica hinges on the respect for workers, consumer rights and the environment. It encourages an approach based on continuous improvements which anchor
experience with graduate employees. It is limited not to technological fields but also includes marketing website and e-commerce development and product design
o Accompanied monitoring/evaluation of project by an external consultant Innovation Assistant is now a key tool in the regional innovation system and has been
on a pool of one hundred advisers technological or generalist) to visit SMES, identify needs and support them
and Parenthood (ERIK ACTION), coaching activities through external experts, such as in Innovation Stockholm (INNOHUBS) and Tameside Business Family (MINI-EUROPE) or
workers, consumer rights and the environment. It encourages an approach that is based on continuous improvements which anchor CSR in SME strategies and management systems.
counselling, advising and mentoring resource staffed by local experts from the academia and business environment, available for private individuals as well as businessmen and other entrepreneurs
can be provided via the network of IVEX delegations abroad and in Spain and experts in international
including salaries for Project manager, Supervisor, and 8 students for 7 weeks This GP, which has a lot in common with †Summer Entrepreneurâ€,
through the hiring of innovation experts in order to seek, propose and bring new business opportunities to fruition, including in export markets
recommendations were evaluated then by regional experts for their •Financial burden •Organizational efforts •Expected effects in increasing regional innovativeness
consultants). ) This reduces the distance between regional players and final beneficiaries (SMES and produces tangible results quickly
Growth Expert Group advising the then Commissioner for Research, Janez Potoä nik. 2009 Link •SME opportunities for EU-US collaboration in Horizon 2020.
national experts who authored the case studies. Dominique Guellec, Head of the Country Studies and Outlook Division, provided overall guidance and support for the project
Group (Patries Boekholt) and the comments received by experts, including Dominique Foray, Philip Mccann, Raquel Ortega, Claire Nauwelaers, Alessandro Rosiello and Michele Mastroeni and Dimitrios
results of an expert advisory group to the EU. Tasked with finding an alternative to public policies that
labour market policy and education and skills) and horizontal innovation policies (e g. R&d tax credits. A smart specialisation strategy means that government efforts
and rigidities (e g. labour market barriers) that prevent shifts in specialisation patterns. Smart specialisation also draws on the broad economic research on
specialisation focus on social policies such as unemployment and increased worker (retraining, smart specialisation arguably offers an opportunity to foster a dynamic economic process that accelerates
social institutions (labour-employer relations) also affect factor endowments Framework policies. Broad policies such as investment in education and infrastructure, social policies and
Imperfect competition, product market and labour market conditions can influence the degree of market integration Industrial policies (e g. taxes and subsidies) can also play a role in shaping the production structure, for good or
In Flanders (Belgium) in the case of FISCH (Sustainable Chemistry) the employers federation Essenscia Flanders developed a business plan for the FISCH initiative,
skilled workers as an important challenge for future growth The necessary mechanisms or structures for these new †entrepreneurial bottom-up initiatives†should
ii) the participation of highly skilled workers in the process, given the increasingly cross-sectoral, cross-technology and cross-border dimension of activities, in order to easily
employees, number of newly established enterprises, Gross domestic product, and export data per economic sector For countries, sufficiently detailed, internationally comparable economic data is available from OECD (www. oecd
The most appropriate data appear to be OECD€ s regional labour market statistics By comparing specialisation indicators over time, changes in scientific, technological or economic specialisations can
agribusiness practitioners, scientists and the GRDC€ s Executive Managers, with a possibility for other industry experts
international experts and stakeholders to identify emerging issues and trends, Systemic Foresight Methodology). ) Fostering a structural transition from policymaking to cycles of policy
2 See also (EC 2011) Final Report on High Level Expert Group on Key Enabling Technologies.
For example, developing labour markets or innovation in a city or in a rural area may not entail the same
9 For example, Universities can provide private and public authorities both with strategic advice and experts to work
the GRDC€ s Executive Managers, with provision for other industry experts to participate as appropriate
promotion in Gwangju, the average annual growth rate of production, number of employees and companies are 19.2%,9. 6%and 5. 0%respectively.
number of employees has jumped also to 8 270 at 377 companies in 2010 Regional and national policies that have been decisive for prioritisation of domains
vehicles (2011 findings) produced in Turkey and providing employment opportunities for approximately 45 000 people, the region is the centre of the Turkish automotive industry.
If United kingdom firms and workers can adapt to the shift in production to ultra-low carbon vehicles, the potential market in the United kingdom and abroad
and attracting leading management and research staff workers to the region through lifestyle benefits such as quality education, healthcare and recreational
small firms (e g. less than 200 employees) in comparison to other industrial areas. Data from the
18 300 employees •Advices and services: Lower Austria implemented programmes (â€oesoft measuresâ€) providing services to support R&d&i activities of SMES.
%In Lower Austria especially small companies(>9 employees) were engaged largely in innovation activities. Still below average are innovation activities in the service sector.
means of communication with experts and STI implementers and via ex-post evaluations Coordination activities to support S3
power, experts, agents responsible for the process, etc. are not suitable to take on these roles Bottlenecks and threats for the innovation ecosystem that hamper entrepreneurial discovery
closed down their manufacturing facilities and left thousands workers unemployed. The incentive system was adjusted subsequently to target FDI involved in higher value added operations (high-tech
Each start-up has its own consultant, who  OECD 2013 115 can connect the new entrepreneurs with growing network of mentors and coaches either
market for world class experts became global, only global ambitions can lead to sustainable success that makes a region attractive
workers being a challenge for growth, and underlined that in some key areas in within the IT field there
experts and citizens. At the moment all regional policy strategic documents are being updated to be in line with the superior the Development Strategy of the Maå opolska Region 2011-2020.
government experts to prepare RIS 2013-2020 (the group has been supported by national government experts). ) The working group has organised many meetings dedicated to specific issues of RIS 2013-2020
such as: SWOT analysis, the areas of specialisation in line with RIS 3 Guide, monitoring and evaluation
Economic Council (representation of high-level regional experts from business), Joint Commission of INNOVATION-DRIVEN GROWTH IN REGIONS:
and iv) Labour market and Education Observatory of Maå opolska which focuses on gathering information and improving knowledge of the regional labour
i) GVA per worker; ii) Employment rate; and iii) Happiness and Health The PCTI has selected 25 Performance Indicators based on its own strategic objectives of the PCTI
share of researchers per Working population and iii) Innovation Innovation expenditure as a share of GDP
On the contrary, for the Lahti region the lack of skilled workers and research infrastructures is a main bottleneck for its smart specialisation strategy.
The most appropriate data appear to be OECD€ s regional labour market statistics (e g. number of establishments or number of employees per TL2 region),
which are available for a selection of countries and regions and are aggregated in 37 industries.
regional labour market statistics. The data show a relative specialisation in Manufacture of Coke and Refined Petroleum Products, Manufacture of Chemicals and Chemical Products, and Manufacture of
OECD regional labour market statistics Combining baseline indicators for specialisations in science, innovation, and economic development
The identified topics can then validated by experts and further analysed using bibliometric methods such as indicators of publication activity and citation impact and (international) collaboration of the main
Claire Nauwelaers, independent consultant, Belgium Smart policies need smart governance. The governance question lies at the heart of the OECD-TIP
Independent expert assessments are frequent too, and regions indulge more than countries in international benchmarking practices.
%Foresight Peer reviews Expert assessments SWOT analyses International benchmarking Regions'use of assessment methods not at all seldom regularly
%Foresight Peer reviews Expert assessments SWOT analyses International benchmarking Countries'use of assessment methods not at all seldom regularly
with external experts. The results are used as the basis for the strategic choices†•â€oeoften hard data give surprising results
entrepreneurs able to spot â€oeweak signalsâ€, external experts, the involvement of users (to avoid falling into
or do regional employers need to look abroad for qualified personnel •How do you assess the climate for entrepreneurship in your region?
employers absorb graduates or are forced graduates to look elsewhere INNOVATION-DRIVEN GROWTH IN REGIONS: THE ROLE OF SMART SPECIALISATION
and participative or rather driven by experts •Do you have an evaluation system for your regional growth
resources or would you have to involve external experts •Who is addressing innovation policy in your region (i e. the EU, your national government, the
Claire Nauwelaers, independent consultant, Belgium Introduction The OECD-TIP enquiry on smart specialisation governance Goal of the governance enquiry within the TIP project
employees (informal employment. According to Terziovski (2010) Small and Medium enterprises (SMES) in the manufacturing sector make a significant contribution to economic
of employees, financial position or annual turnover. However in Zimbabwe, according to Small and Medium Enterprises Institute, SMES are defined as a registered enterprise with employment
employees and an annual turnover in sales of a maximum of 830,000 U s. dollars 2. 2 SMES€ sustainable Development
constantly experience shortages in capital to employee skills to improve production capacity which makes it necessary to continuously improve their production strategies with customized
(1988) for instance, suggested that the smallest firms (20 employees) had the benefit of individualism, the larger firms (50 employees) had the benefit of more resources and systems
while the intermediate group (20-49 employees) lacked the best of either world. Ettlie and
Rubenstein (1987) in support stated that for radical innovations they required additional funds for technical work, capital investment for plant and equipment, marketing and promotions.
customers, motivation of management and labour force, less bureaucracy, little filtering of proposals with strong interest in product development and technological change as part of the
ï The professional qualifications of the workforce ï Various kinds of technological effort which induce further accumulation of techno
At individual level, the capacity included employee empowerment and engagement, trust, training, job rotation, and the extent and range of
and labour force, less bureaucracy, little filtering of proposals with strong interest in product development and technological change as part of the characteristics and strengths of an
workers 33%40%12%10%0 Results were aggregated in the agreeing and disagreeing range. From the respondents
At individual level, the capacity included employee empowerment and engagement, trust, training, job rotation, and the extent and range of individual networks
SMES required more than just having the professional qualifications of the workforce. The results also suggest that on the job training is required equally for innovation to succeed in
policy makers and transport experts www. eltis. org to boost the development and wide-scale application
knowledge-intensive consultants) plays an important role in this respect. Recent research shows that these services play a crucial role in innovation processes
And, finally, business administration experts and organisational sociologists discuss the question of how to interpret the far more open business strategies demanded by the network
experts and laymen producers and the users of knowledge; different (scientific disciplines; policy and science R. Smits/Technological Forecasting & Social Change 69 (2002) 861†883878
30.5%of firms with a number of employees ranging from 20 to 49, were considered as innovators and 93
%of those with more than 2000 employees were engaged in this process (SESSI, 1996. These results do not
-pany is based on the quality of their employees and on their commitments to networks of innovators.
more than 500 employees benefited from the financial aid 740 F. Bougrain, B. Haudeville/Research Policy 31 (2002) 735†747
Size and status of firms Employees Regional group Subsidiary of group Totala Sectors 1†9 10†19 20†49 50†99 100†250 251†499
1†9 employees â'0. 9152â (â'1. 938) â'1. 2468â â (â'2. 536) â'1. 1226â â (â'2. 936
10†19 employees 0. 240 (0. 487) 0. 216 (0. 415) †SME (20†49 employees) 0. 1231 (0. 296) â'0. 2114 (â'0. 485) â€
SME (50†99 employees) 0. 9406â (2. 002) 0. 7647 (1. 551) 0. 8808â (2. 304
SME (100†250 employees) â'0. 1773 (â'0. 395) â'0. 3186 (â'0. 667) â€
SME (251†499 employees) â'0. 4788 (â'0. 763) â'0. 9574 (â'1. 473) â'0. 7976 (â
'1. 388 Regional group 0. 9187 (1. 457) 0. 9871 (1. 484) 1. 1564â (2. 090
only for very small enterprises (less than 10 employees. For extensive results on the relation between firm size and innovation
•the number of executives employed by the firm •and the existence of a design office
to take into account the percentage of executives to employees for SMES with less than 10 employ -ees.
We thought that these figures would not have been significant. Consequently, we just relied on
Size (number of employees) â'0. 00018 (0. 861 Executives(%)â'1. 3198 (â'0. 431
Design office 0. 045+(0. 088 n 79 83 91 Log likelihood â'53.279 â'185.3175 â'186.8962
Influence of executives presence on success rate of cooperative projectsa Project result %of executives to employees
Success Success rate Failures Failure rate Number of projects From 0 to 5 9 42.9 12 57.1 21
a According to the Ï 2-test, there is no direct link between the result of a project and the percentages of executives to employees
5. 3. The contribution of executives to successful collaborative relationships The presence of executives indicates that the en
-trepreneurial manager delegates part of his power to its subordinates. So, he can spend more time to run effec
-ence of executives should increase the success rate of innovation. Our empirical results invalidate what we
of executives to employees. Following three elements may explain why collaborative relationships are not more successful when the percentage of executives to
employees is larger •This category is heterogeneous. Research and pro -duction managers are often at the heart of the
innovation process. Similarly, sales managers will enhance the firm†s ability to respond to prospects
administrative executives do not play a key role during the innovative activity. In other words, the percentage of executives is only quantitative.
It does not give any information on the organisational efficiency of the firms (Perrin, 1991
-ucation influences the receptiveness of executives to external sources and their approach to innova -tion problems to a considerable extent (Gibbons
When executives with a high level of education are confronted to a complex problem they recognise if the firm can rely on its
as well as executives 5. 4. The contribution of design office to successful collaborative relationships The activity of a design office is not as formal as in
employees working there are more able to understand information flowing through industrial networks These results are in conformity with the assertion of
manpower Indeed, our results show that a design office facili -tates the use of extensive information networks.
251 and 499 employees were all independent The other categories concern large enterprises and subsidiaries.
than 500 employees whose headquarters is located in the Centre region and subsidiaries of company whose
group employment exceeds 500 employees and is lo -cated outside the Centre region By holding concurrently two criteria, the size of the
The contribution of executives to successful collaborative relationships The contribution of design office to successful collaborative relationships
According to the Small Business Administration (2008), small firms in the US represent 99.7 percent of all employer firms and
employ over half of all private sector employees. They make up 97.3 percent of all exports
per employee than large firms. These small businesses make up approximately 29.6 million businesses with 6 million of these
with employees. Thus, it can be seen that small business and SMES are a critical factor in the economic fabric of nations and
This open model has been gaining support due to several factors, such as worker mobility, short product life cycles
Generally however, â€oesmall†is considered to be fewer than 100 employees, and medium-sized is under 500 employees (Headd
& Saade, 2008 A. Innovation Early research has examined the important role of innovation within entrepreneurship (Schumpeter, 1947.
Frequently used measures of performance criteria include profitability, ROI, number of employees, revenues. Each measure has strengths and weaknesses (Brush and Wanderwerf, 1992;
All businesses are under 50 employees, with a majority in both samples of fewer than 10 employees.
Most businesses are relatively young. Only 9 of them are over 20 years old in the
TABLE 2 FIRM CHARACTERISTICS †SIZE (NUMBER OF EMPLOYEES Characteristic Range Australian Businesses %n=201
Number of Employees Less than 10 From 10 to 20 From 21 to 50 More than 50
owners/managers, SME employees and the economies in which the SME operates. High levels of innovation can facilitate firm
important role in innovation and provide alternative employment opportunities for many subsets of the adult population 2
number of trusted actors such as financiers, business consultants and marketing associations Flatten et al 2011 Absorptive capacity is determined by entrepreneurship and firm-level attributes.
comprising 27 firms, 3 experts, 11 major players of the local innovation system and one global buyer.
They work from home, with casual workers generally sitting outside on small chairs or on the ground.
or as apprentices at subcontractors or exporters Those who combine export and subcontracting have characteristics in between exporters and
Number of workers at subcontractors 311 32 68 Staff in-house and subcontractors 393 48 93
†5 workers I trained really well. I also give them an opportunity to express themselves.
their workers. I just give an idea and design, and workers can add ideas that fit in better with their
technique. We are a team. I know the technique, but I can†t really do it.
indicators, such as ownership, turn over, age of the firm and number of workers in subcontractors have no significant impact
Our workers were thinking that the low IKEA quality is viable for all our clients.
pay workers piece-rates. For some buyers, such as IKEA and the Body shop, limited control of
specific material, generally sourced from within the cluster and produced by skilled workers from the village itself.
chamber only has 5 employees, servicing thousands of firms in Yogyakarta province Business associations are criticized also widely.
#7) as supervisor.(.While I was working, I asked permission to establish my own firm.
I still consider myself his worker, but at home I am the boss. †And later he adds:
LSE=more than 100 employees MSE=10-99 employees SSE=1-9 employees Turnover=average past 5 years
Price segment product ranges from low, medium, high to top end Number of employees=average last 5 years
Source: data collection IHS Working Paper 27.2013. Innovation in SMES. The case of home accessories in Yogyakarta, Indonesia 42
Annex 2: List of respondents of the qualitative study Director, Dekor Asia, Yogyakarta Director, HS Silver
Mark Kwami, Director MKWAMI Design Services, consultant of CBI Nurhadi, production manager, Harpa Green, Yogyakarta
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