and innovation. renewal has always been important for economic growth in norway We must act now
sector constitutes an important part of the norwegian economy the government wants to have a sustainable, efficient and accessible public sector that
in a global economy, with its societies increasingly dependent on knowledge and communi -cation, progressing efficiency, effectiveness and appropriateness of our products, processes
economies of the future will be those which excel at generating and disseminating knowledge and exploiting it commercially†(see â€oeinnovation into Successâ€, UKSPA, Issue 1, 2003) or in
and initiative that support innovation in business and the economy Since the Green Paper on Innovation in 1995 the European commission has been furthering the de
Economy (2004) has identified Innovation Management Techniques (IMT€ s) defined as the range of tools, techniques and methodologies that support the process of innovation in firms
key to survival and success in the new knowledge economy. Whether you are an R&d professional, a
-ence and innovation over the next decade, in particular their contribution to economic growth and pub -lic services,
They also wanted recommendations for economies or process improvement in technical support help desk and staff development areas.
ï Volumes, production, economies ï Seasonal, weather, fashion influences Threats ï Political effects ï Legislative effects
ï Economy-home, abroad ï Seasonality, weather effects "Innosupport: Supporting Innovation in SMES "-2. 2. SWOT Analysis
and sold well, to internal and external stakeholders. It†s all about getting â€oebuy -inâ€.
economists. Usually, the former submit a development proposal and the latter assess it based on the cost of the proposal and the future profit after its materialisation.
economic value of the recycling industry will soon reach over £1 billion in Western europe. As the
amount of economic activity related to recycling will grow immensely and as political and social push will increase for all,
with economic value. Example: Tires, rubber in hoses Cannot be disassembled No known technology for separation Example:
Economy and efficiency ï A cost-effective and timesaving way of applying for patent protection in several different coun
growth of the national economy through employment creation, investments and exports. Despite the importance of SMES for the vitality of the economy and the potential offered by the IP system for en
-hancing SMES competitiveness, SMES often under utilise the IP system The linkage between an organisation†s overall strategy and its IP strategy will be more significant in
In the new economy, one of the preconditions for being able to compete is that an organisation can create,
models and simulations for economics and business teachers, lecturers and students. The simulations also have support materials that have been written to enhance their educational value.
Business studies, Economics, Accounting etc http://www. engines4ed. org/hyperbook/nodes/NODE-130-pg. html Dustin sets up situations that the student will encounter in real life
most important development in business and communication in the history of the global economy However, because the Internet is developing at such an amazing rate those companies who put off
-pled its shareholder value in only five years Example of characteristic 4 For example, prior to being acquired by RWE AG in 2000, VEW Energie AG,
ï Campus 02 Fachhochschule †Studiengã¤nge der Wirtschaft (Courses for Economy in Campus 02 Polytechnic
globalised economy, foreign language and intercultural competencies have become decisive factors Products, services and information are moving fast between continents
operating in a knowledge based economy have to rely increasingly on the interrogation of non
development opportunities of developing economies and to assist their efforts to integrate into the world economy
ï The World Economic Forum (WEF) www. weforum. org is a private not-for-profit foundation
have enhanced greatly the competition spurred by the globalization of the world economies. Even small and medium-sized enterprises (SMES) are no more immune to the challenges that the
SMES play a key-role in most economies, in that they constitute the largest business block and
5. 2 Cost Explosion in Booming Economies...22 5. 3 Protection of Intellectual Property rights...22
economies. Even small and medium-sized enterprises (SMES) are no more immune to the challenges that the globalization brings about.
worrisome, situation since SMES play a key-role in most economies, including in Germany in that they constitute the largest business block
-oriented competition from low-cost producers from emerging economies, on home turf and abroad (Tiwari et al.
while elaborating the crucial role that SMES play in the economy 2. 1 Innovation Innovation, according to Rogers (2003), is â€oean idea, practice,
in economic activity, irrespective of its legal form†(EC, 2003a. As far as the size -component is concerned,
though SMES play an important role in the national economy as discussed in the following
exemplarily demonstrate the key-role which SMES play in Germany†s economy. For detailed discussions on SMES€ role in the German economy see Hamer (1997), Bundestag
2002), GÃ nterberg and Kayser (2004), and Idw (2004 2. 3 Connecting SMES to Innovation
from emerging economies in Asia and Eastern europe 1 Ifm Bonn works with a definition of SMES that differs from the official definition
economy like that of Germany Besides, the globalization does not bring in only challenges but also presents an
and Hamburg Institute of International Economics (HWWA, 2004 Comparing the findings of the aforementioned surveys it would not be an unreasonable
elsewhere in Germany and other developed economies we conducted a new set of investigation. The methodology and selected results of this study are explained in the
Manufacturing, Maritime Economy, Medical Equipments, Logistics, and Services sector To reduce the time needed to fill out the questionnaire,
Idw) on behalf of Germany†s Federal Ministry of Economics and Technology (BMWI predicts that Germany will be short of 95,000 engineers and 135,000 scientists by the year
Unsaturated, emerging economies in Asia are rapidly taking over the role of â€oelead markets†by their openness for consumption and the willingness to spend money on technological
the legal requirements (in case of high barriers) or they may cause high opportunity costs in the form of lost business opportunities (in case of prohibition.
more people in emerging economies are having financial resources to buy high-end products (EIU, 2004), and the number of the middle class consumers is growing rapidly in
alia in advanced economies. These â€oechances††though realistic †are fraught with certain challenges that need to be addressed
felt in the booming economy of China, where German firms are finding it increasingly difficult to recruit local technicians,
5. 2 Cost Explosion in Booming Economies The cost advantage of many â€oeemerging†nations with booming economies is disappearing
in many respects, for instance, wages of highly skilled labour in India reportedly grow by 10 to 15%and above per annum on average;
often faced by SMES in Germany, the EU or anywhere else in industrialized economies At the same time these â€oeglobal†opportunities are associated invariably with challenges
development, Economist Intelligence unit Ernst, D. 2006: Innovation Offshoring: Asia†s Emerging Role in Global Innovation
Innovationswettbewerb, Hamburg Institute of International Economics, Hamburg Idw (2004: Mittelstand in Deutschland †Stiefkind der Wirtschaftspolitik, Institut der
today†s global economy 2. Innovation is a broad term that encompasses virtually any new development in firms.
creating a more dynamic economy and greater employment opportunities. In fact, the national climate for private sector innovation has an impact on businesses of
more generally for providing a competitive foundation for national economies. Because they often lack the resources to engage in in-house training,
Malaysia is one of the fastest growing economies of the world and is based largely on SMES that contribute almost
Malaysian economic growth and development especially in this competitive global environment. Despite the government focus on SMES,
maintaining the growth of the Malaysian economy and the role of innovation in the overall performance of the SMES
Mathematical Methods in Engineering and Economics ISBN: 978-1-61804-230-9 145 management system.
Mathematical Methods in Engineering and Economics ISBN: 978-1-61804-230-9 146 result is presented in Table 1
Mathematical Methods in Engineering and Economics ISBN: 978-1-61804-230-9 147 3 Kanter, R. M. 2006.
Economy, LICOS Discussion Paper, No. 150 26 Hyytinen, Ari; Toivanen, Otto (2003: Do financial constraints hold back innovation and growth?
The Research Institute of the Finnish Economy ETLA), No. 820 27 Salim, I. M, . & Sulaiman, M. B. 2011).
Mathematical Methods in Engineering and Economics ISBN: 978-1-61804-230-9 148 32 Clausen, T. H.,Korneliussen, T,
Mathematical Methods in Engineering and Economics ISBN: 978-1-61804-230-9 149
Published on Horizon 2020 (http://ec. europa. eu/programmes/horizon2020 Innovation in SMES Horizon 2020 actively supports SMES by providing both direct financial support, and indirect support
3-Capturing innovation impulses from emerging economies...30 4-Capabilities for Design-Driven Innovation in European SMES...
Exiting the economic crisis and achieving the employment and growth targets of the Europe 2020 strategy requires a competitive industry that builds its competitiveness on innovation in
Small, innovative companies create the majority of new jobs in the European economy. A strong rationale exists for public support to SMES€ innovation activities in order to overcome
and underpin future economic growth jobs, and progress towards a resource-efficient economy ï Further leverage
and complement support for innovation in SMES and other funding which may be provided by national or regional authorities (including under the
are open and bring together already a critical mass of enterprises and innovation stakeholders Establishing such platforms will not be supported
policies and supporting various groups of stakeholders is excluded from the delegation to EASME and will
3-Capturing innovation impulses from emerging economies During the next decades growth of the world economy will be concentrated in emerging
economies with a small but steeply rising purchasing power of individuals, compared to European standards.
An increasing number of multinational companies orient their product and service innovation activities towards the needs of clients in emerging economies and
identify new business opportunities for such product even in mature markets. Govindarajan 20 documented many such cases
preferences in emerging economies, guides to cooperation with local science, technology and innovation agents, tools to support the enterprise in identifying gaps and building-up internal
Associated Countries and between the relevant stakeholders (National authorities and support services). ) Awareness and training material shall be produced based on cases studies for
To capture the growth opportunities notably in developing countries and emerging economies enterprises innovate specifically for these markets building on local expertise and
It shall bring together all relevant stakeholders to discuss how SMES can benefit from the dynamics and opportunities of international R&i
has been set up to provide stakeholder input on the overall Horizon 2020 scientific and technological strategy, with respect to maximising the SME relevance and impact of the
policies and supporting various groups of stakeholders is excluded from the delegation to EASME and will
policies and supporting various groups of stakeholders is excluded from the delegation to EASME and will
IN A GLOBAL ECONOMY TOWARDS A MORE RESPONSIBLE AND INCLUSIVE GLOBALISATION EXECUTIVE SUMMARY OF THE BACKGROUND REPORTS
in a Global economy Towards a More Responsible and Inclusive Globalisation Executive Summary of the Background Reports
†to achieve the highest sustainable economic growth and employment and a rising standard of living in member countries, while maintaining financial
stability, and thus to contribute to the development of the world economy †to contribute to sound economic expansion in member as well as nonmember
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY Â OECD 2004 3 Table of contents Preface...5
SMES in the Global economy...25 Enhancing the Role of SMES for Development...32 Evaluation of SME Policies and Programmes...
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY Preface At the first OECD Conference for Ministers Responsible for SMES, hosted by the
and nonmember economies adopted the â€oebologna Charter for SME Policiesâ€. They envisaged the Bologna Conference as the start of a policy dialogue among OECD
member countries and nonmember economies and that it would be followed up by a continuous monitoring of progress with the implementation of the Bologna Charter
arrangements and political context across the economies participating in the Bologna Process, now more than 80, means that not all parts of specific policies and
promoting innovative SMES in the global economy. In broad terms, these policy messages and recommendations elaborate on the themes developed in the Bologna
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY Introduction Ministers have the opportunity to assess priorities
50 nonmember economies at Ministerial level to exchange views on â€oepromoting Entrepreneurship and Innovative SMES in
economy and hence the general business environment in which SMES must operate. Other issues relate to policies and
Growth Project (The New Economy: Beyond the Hype, OECD, Paris 2001) which underlines the need for micro-policy reforms to
economies. These relate in particular to the four main micro -drivers of growth: entrepreneurship, innovation and
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY 8 SMES, especially in developing economies, to take best
advantage of this process This report summarises the background reports prepared for this conference The main messages emerging from the preparatory
â SMES in the global economy â Enhancing the role of SMES for development The final two sections summarise work relating to two
dynamism of modern economies. New firms attract resources to new activities, and when they prosper and are
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY innovative firms once they establish themselves. There is
improvements in the economy as a whole. While in the short term cost reductions and increased competitive pressure can lead to job shakeouts,
economic growth and rising living standards †and provide social benefits Governments have recognised increasingly the contribution that â€oesocial entrepreneurship†can make to
affect the economy as a whole but impinge importantly on potential entrepreneurs and SMES. These include sound
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY 10 way these structural policies affect enterprise creation and
advanced countries than in developing economies, limits management flexibility and leads to smaller firm size and
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY instruments for encouraging entrepreneurial behaviour in societies, and evidence suggests that such programmes can
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY 12 of these programmes and policies are designed and
impinge on SMES and innovation in knowledge-based economies â Ensure the reduction and simplification of administrative regulations and costs
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY †and based on evidence to the degree that
women in developing economies. Furthermore, as women behave differently from men, their entrepreneurship provides society with different, and often innovative
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY 14 Figure 1. Female employers and own-account workers
Selected APEC economies, 1998 Â OECD 2004 PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY
The empirical basis for informed policy design needs to be improved†Reliable data and analysis relating to women†s
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY 16 specifically. Such policies are part of the wider package of
economic and social arrangements in any economy and there is no simple relationship between such policies and
Economies in transition and the Nordic countries, for example, have some of the best provisions for working women but do not stand
both within economies and internationally to support the diffusion of knowledge and experience within the private
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY Tools for SME Innovation Financing for innovative SMES
in a global economy â Periodically evaluate the impact of any SME-related policies on the success of
role of women entrepreneurs in the economy. This requires strengthening the statistical basis for carrying out gender-related cross-country comparative analyses
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY 18 capital. First, the returns to innovative activities are highly
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY accessing finance are most acute (Figure 2). It should also be
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY 20 Basle II agreement on innovative SMES and on SMES in
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY Recognition and measurement of intangible assets should
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY 22 †and geographically concentrated clusters of
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY development, the regional attractors of knowledge -intensive foreign direct investment, and the governance
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY 24 Key policy recommendations â Improve SMES access to information about networking opportunities.
require co-operation among all stakeholders †including SME associations, public agencies and intermediary organisations †to correct deficiencies in existing
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY SMES in the Global economy Facilitating SMES€ access to global markets
Globalisation offers SMES opportunities†The globalisation of business has drawn increasingly SMES into global value chains through different types of
and some nonmember economies is that of a low, although increasing, level of activity by SMES in international
-operation (APEC) economies suggests that SMES account for less than 30%of total exports in the region. 3
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY 26 â In Europe, exporting activity rises with firm size.
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY across borders. This applies especially to access to information
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY 28 business-to-business interact ion and real-t ime
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY technologies to encourage interoperability and innovation and to expand choice.
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY 30 †and digital content, including increased use
-border co-operation among all stakeholders is necessary to reach these goals. Of particular relevance for small firms are
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY Key policy recommendations â Move beyond policies for basic connectivity and ICT readiness to facilitate more
-operation between stakeholders and the development of rules with cross-border application â Develop and distribute digital content,
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY 32 Enhancing the Role of SMES for Development
economies need to strengthen their capacity to take advantage of trade and investment opportunities Recent assessments of growth recognise an
global economy through trade and investment. Enterprises in transition and developing economies face major challenges in strengthening their human and institutional
capacities to take advantage of opportunities in these areas While governments make trade and investment policies, it
implications for the economic growth potential of transition and developing countries SMES have an important role
make up a relatively small part of the economy, contributing less to employment and output than the informal sector
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY development and poverty reduction strategy of transition
â Dialogue and partnerships between the stakeholders (public sector, private sector and civil society) foster ownership of
partnerships between stakeholders about implementation and review of supportive measures, particularly, those related to capacity building in private sector service
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY 34 Trade and investment capacities of SMES
involves participation by all key stakeholders. The overall objective should be to increase the volume and value of
host economies include sources of external capital technology and knowledge transfer, job generation, skills enhancement and enterprise development through linkages
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY competitors who set new standards and necessitate greater
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY 36 Governments in advanced economies should promote policy
coherence and greater effectiveness of development assistance Finally, overall policy coherence is essential for the
economies. These have to go hand in hand with market access and improved policy co-ordination among donors
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY Evaluation of SME Policies and Programmes Systematic
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY 38 SME policy makers should develop an â€oeevaluation
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY delivering the programme. Their detailed knowledge of the
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY 40 Towards More Systematic Statistical Measurement of SME Behaviour
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY â Available high-quality empirical analysis, notably cross
economies should be involved in this work where possible â Develop an integrated business statistical register. This requires that countries
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY 42 â It is desirable to contain costs at statistical agencies and
Dept. of Economics 549 Evans Hall UC Berkeley Berkeley, CA 94720-3880 and NBER bhhall@nber. org
shareholder, which suggests a high required rate of return and therefore a high cost of capital. However for the other firms (closely held), R&d is not valued at all, which
Performance in Canadian Manufacturingâ€, Canadian Journal of Economics Vol. 36 (3), pp. 634†657 Benavente, J. M. 2006), â€oethe Role of Research and Innovation in Promoting
Productivity in Chileâ€, Economics of Innovation and New Technology. Vol 15 (4/5), pp. 301-315
West German Manufacturing Industriesâ€, Economics of Innovation and New Technology, Vol. 12, pp. 343-360
an Econometric Analysis at the Firm Levelâ€, Economics of Innovation and New Technology, Vol. 7 (2), pp. 115-158
across Four European Countriesâ€, Oxford Review of Economic policy, Vol 22 (4), pp. 483-498 Griliches, Z. 1995), â€oer&d and Productivity:
Stoneman, P. ed.),Handbook of the Economics of Innovation and Technological Change, Oxford, 52-89
Knowledge-Driven Economyâ€, Economics of Innovation and New Technology Vol. 15 (4/5), pp. 289-299
Economics of Innovation and New Technology, Vol. 6 (1), pp. 29-49 Heckman, J. 1979), â€oesample Selection Bias as a Specification Errorâ€, Econometrica
a Sensitivity Analysisâ€, Economics of Innovation and New Technology. Vol. 15 (4/5), pp. 317-344
in Chinese Industryâ€, Economics of Innovation and New Technology. Vol 15 (4/5), pp. 345-366
â€, The Journal of Industrial Economics, Vol. 36 (2), pp. 253-256 Klette, T. J,
A New Approachâ€, International Journal of the Economics of Business, Vol 8 (3), pp. 343-364
Production Economics Vol. 76 (1), pp. 61-85 Mairesse, J, . and M. Sassenou (1991), â€oer&d Productivity:
Seven European Countriesâ€, Economics of Innovation and New Technology Vol. 15 (4/5), pp. 391-413
Economics of Innovation and New Technology, Vol. 16 (7), pp. 485-499 Potters, L.,R. Ortega-Argilã s,
-Factor Productivity Growthâ€, Economics of Innovation and New Technology Vol. 15 (4/5), pp. 367-390
stakeholders as well as the complex problem-solving required in such endeavors. We also identified five mini-cases of SMES that developed compelling new business models that were
more prominent role in the economies of most European and Asian countries The type of customers that SMES serve also influences the type of innovation they undertake
The first â€oemini-case†illustrates how a supplier of a commodity product changed its business
nations from product-based to service-based economies, research agendas have not kept pace 23 Indeed, the research literature on innovation divides strongly into two separate areas of
â€oemini-case†provides an interesting and illustrative example of a company supplying commodity chemicals yet providing greater value to customers, and partners
whereby several stakeholders participate in parallel in an ongoing dynamic relationship to provide a total valuable solution to all
The interviewees varied greatly in their opinion about the role of MEP in the economy
U s. economic activity in the private sector based on service revenues exceeds 82%(Rae, 2005 Moreover the research is largely European in content.
Small and Medium-Sized Enterprises and the Global economy. G. I. Susman. Northampton Edward Elgar Describes small firm collaboration and networking
Competing in a Service Economy: How to Create a Competitive Advantage Through Service Development and Innovation.
Business Economics 6 (5): 327-347 Describes small businesses compared to large ones on the basis of strengths and
IN THE GLOBAL ECONOMY: STRATEGIES AND POLICIES Workshop 1 ENHANCING THE COMPETITIVENESS OF SMES THROUGH INNOVATION
SME INNOVATION IN A GLOBAL ECONOMY...3 Introduction...4 Globalisation Challenges...4 Globalisation...4 The Emergence of Knowledge as the Source of Comparative Advantage...
SME INNOVATION IN A GLOBAL ECONOMY â This paper serves as the background document for the Workshop on â€oeenhancing the Competitiveness of SMES
of scale economies which small firms face in all aspects of business --Flexible specialisation has proven to be a particularly successful model of industrial organisation:
This explains why economists have reopened the debate on whether some market and systemic failures disproportionately affect small firms,
3. Both scale economies and research and development have become more important instruments for competitiveness in the global economy.
Since SMES seem to be at a disadvantage for both these factors, many experts predicted the demise of SME competitiveness as globalisation increased.
broad range of economic activities in a disparate set of industries across different countries 4. This section briefly explains
what triggered the wave of globalisation reshaping the economy at the end of the 20th century.
of production, such as land, labour and capital, towards knowledge-based economic activities. The ability of SMES in the OECD to create,
been the shift in economic activity away from a local or national sphere toward a much more international
The measures of transnational economic activity which prove there has been a strongly positive trend toward greater global activity include:
machines and electronic communication superhighways, The Economist recently proclaimed â€oethe Death of Distance†on its front page. 2 While the telecommunications revolution has brought the cost of
into knowledge-based economic activities 8. While some firms fell victim to the first strategy, many of the firms from OECD countries that
This alternative involves shifting economic activity out of traditional industries, where the high-cost countries of the OECD have lost their comparative advantage, and into
high levels of employment †knowledge based economic activity. Emerging comparative advantage that is 2 â€oethe Death of Distance, †The Economist, 30,september 1995
3 â€oethe Downsizing of America, †New york times, 3 march, 1996, p. 1 WK1 6 compatible with high wage levels is based on innovative activity.
By contrast, the rest of the economy experienced fairly steady growth at around 3%over this period. 5 Innovative activity of in the United states has jumped, as evidenced
Given the shift in comparative advantage towards more knowledge based economic activity many scholars have predicted the demise of SMES.
But in fact, the share of economic activity accounted for by SMES has risen in most OECD countries.
competitiveness in a globalizing economy. This background paper discusses some of the strategies open to SMES as they try to become more productive and shift more knowledge-based activities
â€oethe Valley of Money†s Delights, †The Economist, 29,march 1997, special section, p. 1 5 Kortum and Lerner 1997, p. 1
This is consistent with economic theories of innovation and technical change where inputs to the innovative process are understood to be heterogeneous
the majority of SMES manage the transition to a global, knowledge based economy Competitiveness Strategies
given industry†s underlying technological conditions, scale economies, and demand. Where scale economies are important,
the revolving door model is more common. While start-ups and new entrants may not be deterred by the presence of high scale economies,
a process of firm selection ensures that only those firms that grow will be able to survive beyond more than a few years
mechanism-the extent of scale economies-may ultimately be forced to exit out of the industry.
untapped in the economy The Information technology Strategy 37. A second strategy SMES can use to improve their competitiveness in global markets involves the
and the microprocessor, help mitigate economies of scale and the gains traditionally associated with large-scale production.
reach scale economies. This notion has received considerable attention in the popular press. Management consultant Tom Peters claims that,
10 Tom Peters,"New Products, New Markets, New Competition, New Thinking,"The Economist, 4 march, 1989
â€oein the physical world, scale economy and standardisation plays a major role. The digital world enables individual product customization†The
local economy. The Mittelstand companies also espouse a strategy whereby they insist on the same high
externalities, ultimately innovative, activity and economic growth. 14 50. There is also theoretic debate about the effect of competition on innovative activity.
because it maximises the ability of firms to appropriate economic value accruing from their investments in
economic activities, but who share a common science base, is more conducive to innovation than a more
While the marginal cost of transmitting information across geographic space has been reduced drastically with the telecommunications revolution, the marginal cost
of transmitting knowledge, and especially tacit knowledge, actually rises with distance 58. Von Hipple (1994) demonstrates that high context, uncertain knowledge,
nature, and knowledge developed for a particular application can have economic value in very different applications.
An emerging economics literature demonstrates that knowledge spillovers are indeed geographically constrained. Data constraints can be overcome to study the extent of knowledge spillovers
There is considerable evidence that the transnational economic activities of SMES have been increasing over time. Not only has the absolute value of foreign direct investment activities by small and
In particular, SMES are disadvantaged clearly by scale economies and other size related ownership-specific advantages. Similarly, they may have more difficulty obtaining inputs on favoured
SMES who want to remain innovative in a global economy Policy implications: Broadening Government Support and Coping with the Diversity of Needs
Localization of Innovation, †Small Business Economics, 9 (1 february, 21-31 Arrow, Kenneth J.,1962,"Economic Welfare and the Allocation of Resources for Invention,"in R. R
Economic policy, 14 (2), 18-29 Audretsch, David B. and Maryann P. Feldman. 1996, â€oer&d Spillovers and the Geography of Innovation
Founded Businesses, †Small Business Economics, 10 (3), 213-225 Buckley, Peter J.,1997, â€oeinternational Technology Transfer by Small and Medium-Sized Enterprises, 9 (1
Small Business Economics, February, 67-78 CEC, 1998, â€oeevaluation of SMES in the Fourth Framework Programmeâ€, evaluation document of the SME
between SMES€, working paper University of Gent, under review at Small Business Economics Cohen, W. and Levinthal, D.,1989, â€oeinnovation and Learning:
Economics, 9 (1 february, 53-66 Feldman, Maryann P.,1994, â€oeknowledge Complementarity and Innovation, †Small Business Economics
6 (3), 363-372 Feldman, Maryann P, . and David B. Audretsch, 1999, â€oescience-Based Diversity, Specialization, Localized
Economy, 100,1126-1152 WK1 34 Gomes-Casseres, Benjamin, 1997, â€oealliance Strategies of Small Firms, †Small Business Economics, 9 (1
February, 33-44 Greenwood, Jeremy and Boyan Jovanovic, 1999, â€oethe IT Revolution and the Stock market, American
of Economics, 10,92-116 Griliches, Zwi. 1992, â€oethe Search for R&d Spill overs, †Scandinavian Journal of Economics, 94,29-47
Hirschman, A o.,1970, Exit, Voice, and Loyalty, Cambridge, MA: Harvard university Press Jacobs, Jane, 1969, The Economy of Cities, New york:
Random House Jaffe, A.,1989, â€oereal Effects of Academic Research, †American Economic Review, 79,957-970
Evidenced by Patent Citations, †Quarterly Journal of Economics, 63,577-598 Keeble, D. and Lawson, C. eds.
Kohn, Tomas O.,1997, â€oesmall Firms as International Players, †Small Business Economics, 9 (1 february
The Economics of Small Firms: A European Challenge, Dordrecht: Kluwer Academic Publishers, 25-41 Loveman, Gary and Werner Sengenberger, 1991, â€oethe Re-emergence of Small-scale Production
An International Comparison, †Small Business Economics, 3 (1), 1-38 Mustar, P.,1997, â€oehow French Academics create hi-tech companies:
Economics, 9 (3), 255-271 Saxenian, A.,1990, â€oeregional Networks and the Resurgence of Silicon valley, †California Management
Economics, 1 (2), 129-136 Schwalbach, Joachim, 1994, â€oesmall Business Dynamics in Europe, †Small Business Economics
6 (1), 21-26 Simon, Hermann, 1992, â€oelessons from Germany†s Midsize Giants, †Harvard Business Review
Sternberg, R.,1996, †Technology Policies and the Growth of Regions, †Small Business Economics, 8 (2
The Example of the Federal republic of germany, †Small Business Economics, 2 (2), 105 -118 Sternberg, Rolf, 1996, â€oetechnology Policies and the Growth of Regionsâ€, Small Business Economics, 8 (2
75-86 Van dijk, Meine Pieter, 1995, â€oeflexible Specialisation, The New Competition and Industrial Districts, †Small Business Economics, 7 (1), 15-28
Von Hipple, E.,1994, â€oesticky Information and the Locus of Problem solving: Implications for Innovation, †Management Science, 40,429-439
and Firm Dynamics, †Small Business Economics 7 (1), 29-40 Wagner, Joachim, 1997, â€oefirm Size and Job Quality†A Survey of the Evidence from Germany, â€
Small Business Economics, 9 (5), 411-425 WK1 36 Zucker, L.,Darby, M. and Armstrong, J.,1994, †Intellectual Capital and the Firm:
Overtext Web Module V3.0 Alpha
Copyright Semantic-Knowledge, 1994-2011