Small and Medium-sized Enterprises (SMEs) in Germany – Research Performing SMEs Benefit More from Innovations

Small and medium-sized enterprises (SMEs) continuously carrying out research and development (R&D) benefit significantly more from innovations than companies without an own R&D activity. This gap becomes particularly evident when SMEs launch entirely new products or processes.

In this case, companies without research activity generate on average about 5 per cent of their total turnover by selling market novelties. In research performing enterprises, on the other hand, this share lies at 17 per cent and is thus three times as high. Continuous R&D activity has a particularly positive effect on smaller companies with up to 49 employees. However, companies involved in R&D with up to 499 employees also benefit considerably more than enterprises without any research activity. These are the main results of a current survey on success factors in the innovation management of small and medium-sized enterprises conducted by the Centre for European Economic Research (ZEW) in Mannheim.

The ZEW study further suggests that the combination of continuous, internal R&D activity with measures of staff development and cooperation with external partners creates an ideal basis for the innovation success of SMEs. The market success of a product or process innovation depends not only on its technological maturity but also on an efficient high-quality production and a marketing strategy able to convince potential customers of the innovation’s usefulness. It is thus very important for innovative companies to lead targeted recruiting campaigns. The crucial role of external cooperation results from the fact than the large majority of SMEs is able to gain only a fragment of the knowledge necessary for launching a market novelty. The enterprises therefore depend on third party knowledge and experience.

Contact

 Dr. Christian Rammer, Phone +49(0)621/1235-184, E-mail rammer@zew.de