•Public funding impact is maximized if awarded to firms aligned with EU OI strategy.•Divergence of SME Instrument scope and results creates budget allocation inefficacies.•DeMarkers: complex ...indicators operationalizing firms’ engagement in OI dimensions.•EU budget is awarded to SMEs less engaged in OI than SMEs not receiving funding.•Introducing the DeMarkersas SME evaluation criteria in a more OI-informed policy.
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.
Purpose
The purpose of this paper is to explore and compare the extent of intellectual capital (IC) and its four components in high-tech and non-high-tech small and medium-sized enterprises (SMEs) ...operating in China’s manufacturing sector, and to examine the relationship between IC and the performance of high-tech and non-high-tech SMEs.
Design/methodology/approach
The study uses the data of 116 high-tech SMEs and 380 non-high-tech SMEs listed on the Shenzhen stock exchanges during 2012–2016. The modified value added intellectual coefficient (
MVAIC
) model is used incorporating four components, namely, capital employed, human capital, structural capital and relational capital. Finally, multiple regression analysis is utilized to test the proposed research hypotheses.
Findings
The findings of this paper reveal that there is significant difference in
MVAIC
between high-tech and non-high-tech SMEs. The results further indicate a positive relationship between IC and financial performance of high-tech and non-high-tech SMEs. Specifically, IC is positively associated with firms’ earnings, profitability and operating efficiency. Additionally, capital employed efficiency, human capital efficiency and structural capital efficiency are found to be the most influential value drivers for the performance of two types of SMEs while relational capital efficiency possesses less importance.
Practical implications
This paper will provide a valuable framework for executives, managers and policy makers in managing IC within the Chinese context.
Originality/value
To the best knowledge of the authors, this is the first empirical study that has been conducted on high-tech and non-high-tech SMEs in the manufacturing sector in China.
Small and medium-sized enterprises (SMEs) are the backbone of every economy. So, when an external crisis jeopardizes markets, such as the recent COVID-19 outbreak, SMEs are hit with great force. ...Their so-called liability of smallness, a lack of resources that would shield them from outside shocks, worsens the situation. This manuscript conducts a literature study on 69 manuscripts that studied SMEs in previous crises and proposes ways to overcome economic downturns in the areas of finance, strategy and the institutional environment. The paper finds a “strategy/funding chicken-and-egg-problem” and proposes an effectual world view when dealing with situations of great uncertainty.
•Existence of certain accelerators can generate new business opportunities.•Necessity of SMEs digitalization struggling to satisfy customers’ shopping expectations.•Cannibalizing offline market share ...due to online commerce growth.•e-Receipt: a highly disruptive element on long-term survival regarding competitors and raising circular economy.•Tangible and economical green e-Receipt approach to reduce paper waste footprint.
The brick-and-mortar retail SMEs (Small and Medium Enterprises) market is confronted with unprecedented challenges: digitization procurement in a company not prepared for a digitalized business model, and the actual digitalization process of the business model, which not only changes the business rules but disrupts them with new possibilities.
Despite Industry 4.0 transforming manufacturing in terms of the way of producing and distributing goods by means of process digitization, the offline retail SMEs market is struggling to satisfy customers’ shopping expectations due to two direct constraints: existing offline competitors operating under a narrowing market share, and online retail competitors increasing market share due to their better positioned eCommerce IT platforms.
The purpose of this work is to study the potential effect of digitalization on SMEs, focusing on businesses operating in the offline retail market, by means of provisioning cloud solutions supporting the business digitization process.
The study is based on data collected from a wide range of official sources in conjunction with extensive research work reviewing technologies applicable to these kinds of businesses. The validation is performed through the Focus Group methodology between the months of June to October 2019, with 20 participants from the Henares Corridor, Madrid (Spain) area, considering them as a relevant sample of offline retail SMEs in Spain.
The value proposition of this study can help offline retail SMEs understand the difference between digitization and digitalization, the necessity of digitalization in their businesses, the existence of accelerators such as e-Receipt cloud solutions, and the disruptive potential of digitalization to their business models on long-term survival regarding competitors and raising the circular economy.
Purpose
This paper aims to examine the influence of corporate social responsibility on financial performance of small and medium-sized enterprises (SMEs) in Ghana by using access to capital and firm ...reputation as mediating variables.
Design/methodology/approach
The authors collected primary data from 423 SMEs within the Accra Metropolis. Partial least squares estimation technique was used to analyze the data.
Findings
The authors documented evidence for a mechanism through which corporate social responsibility results in financial performance of firms: SMEs with improved corporate social responsibility practices are better positioned to achieve enhanced reputation, which translates into improved financial performance. Even though this study did not document a significant relationship between corporate social responsibility and access to finance by Ghanaian SMEs, the authors contend that looking at the positive relationship between them, SMEs can minimize their capital constraints by embarking on CSR practices, which can eventually translate into financial performance.
Practical implications
The authors recommend that for SMEs to enhance their reputation and increase their access to capital, which will eventually result in enhanced financial performance, corporate social responsibility practices should be a major part of their operations.
Originality/value
It contributes to our knowledge on how CSR practices lead to financial performance of SMEs in developing countries. In addition, this is the first of its kind to establish the relationship between CSR practices and financial performance of SMEs in Ghana by using access to capital and firm reputation as mediating factors.
As COVID-19 spreads across the globe, a common public policy response has been to enforce the temporary closure of non-essential business activity. In some countries, governments have underwritten a ...proportion of the wage income for staff forced to furlough or broadened their welfare systems to accommodate newly laid off workers or small business owners. While these actions are helpful, they do not explicitly address the lack of sales trading activity on business income and cash balances. In commentary, we identify what types of businesses have been increasing their cash holdings in the lead up to COVID-19 as an indication of what types of small and medium-sized enterprises (SMEs) are most at risk if the lockdown extends for a protracted period of time. We find that only 39% of the of businesses were bolstering their cash balances leading up to COVID-19 which suggests that 61% of businesses may run out of cash, including 8.6% that had no retained earnings whatsoever with micro firms at particular risk. The importance of precautionary saving for SMEs is critical to enhance resilience when Black Swan events occur.
Using the explicit and implicit Corporate Social Responsibility (CSR) framework, this study investigates how small and medium enterprises (SMEs) and large companies differ in their approach to CSR ...and what association these differing approaches to CSR have with a company's financial and social performances. We develop and validate a stakeholder engagement approach (SEA) scale and then present the results of data collected from 211 SMEs and 179 large companies. The results indicate that while large companies rely more on explicitly articulated and formally enacted approaches to CSR, SMEs integrate social responsibility into their company activities in informal and implicit ways. The results also show that the explicit approach has a positive association with financial performance measures, while the implicit approach has a positive association with social performance. The findings of this study provide a more nuanced and theoretically grounded understanding of differences in the CSR practices of SMEs and large companies.
Small- and medium-sized enterprises (SMEs) face the inherent tension of depending on external partners to complement their internal innovation activities while having limited resources to manage such ...open innovation processes. Given the importance of collaborative efforts between multiple stakeholders, we address the open innovation challenges from the SME perspective at the business-ecosystem level. We present an inductive case study of a particular regional ecosystem and focus on the inter-organizational collaboration between SMEs and other stakeholders in the ecosystem. With this focus, we explore how SMEs perceive, organize, and manage open innovation through strong collaborative ties with other ecosystem members. We identify a particular set of challenges for the SMEs due to the misalignment between their business model and that of their ecosystem. Specific findings include the link between innovation type expressed by diverging understandings of the notion of innovation across the ecosystem and the innovation form (here, open innovation), which should be organized and managed on multiple levels of analysis (SME, inter-organizational, and ecosystem). These findings highlight specific attention points for managing and developing open innovation in a regional business ecosystem, and they contribute both to the business-ecosystem literature as well as open innovation literature.
•The misalignment between SME's and ecosystem's business models causes OI challenges.•Diverging understandings of innovation across ecosystem shapes its innovation form.•OI in SMEs should be organized and managed on multiple levels of analysis.
Technological innovations often lead to redesigns in the business models of established companies, requiring them to incorporate new external knowledge into internal activities. Against this ...background, this study integrates the concepts of business model design, absorptive capacity, and innovation strategy into a novel research model, which analyzes the redesign of established business models in response to the emergence of Industry 4.0. Industry 4.0, also known as the Industrial Internet of Things, constitutes a contemporary research context that is highly relevant for corporate practice but scarcely regarded in management literature until now. The article contains an analysis of data from 221 German industrial enterprises, conducted through structural equation modeling, with separate data for small and medium-sized enterprises (SMEs) and large enterprises. First, the results indicate that the acquisition, assimilation, transformation, and exploitation of knowledge from the environment enable companies to engage in both exploratory and exploitative innovation strategies. Furthermore, the paper includes an evaluation of the role of exploratory and exploitative innovation strategies that reflects in efficiency-centered and novelty-centered business model designs. The distinct characteristics differentiating SMEs from large enterprises are also explained. The implications of absorptive capacity on innovation strategies, which influence the redesign of extant business models, are discussed from a research and managerial perspective.
In the era of economic globalization, small and medium enterprises (SMEs) are recognized as an engine of sustainable economic development in both the developed and developing world. In literature, ...three competitive challenges—the sustainability challenge, the global challenge and the technological challenge—faced by industrial entities in the current globalized economy, are categorized. Of them, this paper undertakes a systemic review of the literature covering the theme of SMEs and technology in order to identify how technological progress in the SMEs, correlates with SMEs survival improvement in the global competition. The review identified six driving forces—social capital, link with Multi-National Corporations (MNCs) and Transnational Corporations (TNCs), innovation, sharing and networking, information technology, and adoption of productivity-enhancing technology—influencing technological upgrade in the SMEs. The review also identified two conditions for successful technological adaptation in the SME sector—availability of technologically skillful workforce in the economy, and identification of opportunities of new technologies in the competition. These conditions could be viewed in the macro environment and emphasize the need for the economies’ readiness towards SMEs’ success.
PDF
