Knowledge acquisition for the internationalization of the smaller firm: content and sources

Internationalization process research emphasizes accumulated experience and networks as sources of knowledge for internationalization. Our understanding, however, as to what this knowledge is in practice for smaller firms, the challenges they face in acquiring it, and how they address those challenges is limited. Integrating organizational learning concepts with our theoretical understanding of the small firm internationalization process, we develop a new framework for understanding knowledge acquisition processes, which are examined with a case study of 10 Scottish internationalizing firms. We find smaller firms may not have relevant experience or useful networks, and rely on sources rarely recognised before. Firms used recruitment, government advisors and consultants to acquire indirect experience. Recruitment is a source of market and technological knowledge and government advisors and consultants a source of internationalization knowledge. Accessing internal information is important for firms that have internationalized. Our integrated theoretical framework identifies knowledge content and sources that are critical for internationalization, but that may be absent

SMEs and virtual R&D teams: a motive channel for relationship between SMEs

In today?s dynamic marketplace, manufacturing companies are under strong pressure to introduce new products for long-term survival with their competitors. Nevertheless, every company cannot cope up progressively or immediately with the market requirements due to knowledge dynamics being experienced in the competitive milieu. Increased competition and reduced product life cycles put force upon companies to develop new products faster. In response to these pressing needs, there should be some new approach compatible in flexible circumstances. This paper presents a solution based on the popular Stage-Gate system, which is closely linked with virtual team approach. Virtual teams can provide a platform to advance the knowledge-base in a company and thus to reduce time-to-market. This article introduces conceptual product development architecture under a virtual team umbrella. The paper describes all the major aspects of new product development (NPD), NPD process and its relationship with virtual teams, Stage-Gate system finally presents a modified Stage-Gate system to cope up with the changing needs. It also provides the guidelines for the successful implementation of virtual teams in new product development

Investigating the technology catching-up trajectory of Chinese Hi-Tech SMEs: an integrated framework from industry-, resource-, and institution-based view

Accepted for WLICSMB 2010Purpose This paper intends to review the literatures on the technology catching-up trajectory of latecomers in order to understand the innovation strategies of Chinese Hi-Tech SMEs (Gu & Tse, 2010; Xie & White, 2006; Chen & Qu, 2003; Lee & Lim, 2001; Kim, 1997). It also tries to construct an integrated framework to investigate their innovation strategies and the impact on organizational performance from the Industry-, Resource-, and Institution-based view (Peng, Wang, & Jiang, 2008). Design/methodology/approach The authors have reviewed papers published in the leading journals in the R&D field and proposed an integrated conceptual framework of innovation strategies of Chinese Hi-Tech firms based on Peng, Wang and Jiang (2008)’s institution-based view framework to examine the innovation strategy from Industry-, firm-specific Resource-based, and Institution-based View Originality/Value This paper pays attention to the institution factors in shaping Chinese SMEs to develop innovative capabilities. Chinese firms have comparative advantages, such as better comprehending Chinese local market, better understanding of local business environment comparing to MNEs. Our paper argues that by developing effective innovation strategies and improving innovative capabilities, Chinese SMEs will be able to survive from the severe competitions from state-owned enterprises and foreign firms in China

Disentangling the Innovation - Internalization Process Through a Structural Equation Model

Innovation virtuously impacts on the degree of international growth, which in turn positively influences innovation activities and then firms�™ performance (Filipescu et al., 2009). Many authors have tried to identify and explain the relationship between these two phenomena at firm level. Only recently, few empirical studies investigate them at a more aggregate level (see e.g. Mariotti et al., 2008). Moreover the literature focuses only on one direction of causality, while scant attention has been paid to inspect empirically innovation and internationalization together (Kafouros et al., 2008; Filippetti et al., 2009; Frenz and Ietto-Gillies, 2007). This paper provides an empirical analysis of the mutual relationship of these two phenomena, taking into account various features of the regions themselves. The empirical study is conducted on data concerning 20 Italian regions covering the period 2000-2008. To better understand the complex relationship between internationalization and innovation, we refer to the Structural Equation Models (SEM). These are multivariate regression type models, in which response variables could in turn act as dependent and predictor within a system of equations, and all variables are assumed to influence one-another reciprocally, either directly or through other variables as intermediaries (Bollen, 1989; McAdam et al., 2010). Through the SEM the relationships are expressed by a set of parameters which explain the magnitude of the effect (direct or indirect) between independent (either observed or latent) and dependent variables. Indeed, internationalization and innovation could act as both dependent and predictor which measurement could be difficult then suggesting the use of latent variables, and where the system of indicators is complex enough to lead at a model specified through two-way relations intrinsically connected. Using SEM approach we are able to specify flexible models dealing with non-standard relations stylized along panel data structure, in which spatial and temporal dimensions do matter

The Industrialisation Process of Asian Small and Medium Firms

National governments throughout the Asia-Pacific Region have identified small and medium enterprises as an important source of economic growth and employment. In the past, SME business strategies have focused on production, relying on their subcontracting and sales contacts with large firms for technological innovation and marketing and on abundant domestic labour forces for comparative advantage. Recently, structural problems in the region arising from the Japanese recession, currency appreciation and rising labour costs have upset these relationships forcing SMEs to move offshore (DFI) to restore cost competitiveness and to upgrade their internal technological and organisational capacities to international standards in order to compete for contracts within more open, international markets. This paper analyses this process of change, analysing the development of SMEs within four Asian countries using a six stage evolutionary model. The majority of SMEs in these countries are still in the earlier second (dependency) or third (internalisation) stages. The more advanced SMEs have moved into the fourth (externalisation) stage, where firms develop independent technology and marketing capacities. To the extent that localisation (stage five) had occurred, it involved local embedded relationships which had limited scope for further internationalisation. Little evidence of regional integration or networking among SMEs was found.Asia-Pacific, industrialisation process, Asian small and medium enterprises

Virtual R&D teams and SMEs growth: A comparative study between Iranian and Malaysian SMEs

This paper explores potential advantages of using virtual teams for small and medium-sized enterprises (SMEs) with a comprehensive review on various aspects of virtual teams. Based on the standing of the pertinent literature, attempt has been made to study the aspects by online survey method in Iran and Malaysia. In both countries, SMEs play an important role in their economies, employments, and capacity building. Virtual R&D team can be one of the means to increase SMEs efficiency and competitiveness in their local as well as global markets. In this context, surveys have been conducted to evaluate the effects of virtuality to the growth of SMEs. The study addresses some differences between two countries in engaging virtual research and development (R&D) teams in their SMEs. It is observed that there is a significant difference between the SMEs turnover that employed virtual team and that did not employ the virtual team. The way for further studies and recommend improvements are proposed.Virtual R&D team, small and medium enterprises, survey, developing countries.

The Internationalization of Small and Medium Enterprises in Regional and Global Value Chains

Production networks and the regional division of labor have been established in East Asia resulting in massive vertical intra-industry trade in parts and components within the region. This phenomenon is known as cross-border production sharing or the fragmentation of production processes into many stages across different countries. New development strategies claim that participation in international production and distribution networks is the key to accelerating economic development in the era of globalization. This process suggests that vertical input-output linkages between local firms and multinational corporations are the most powerful channels to accelerate technology transfers and spillovers. Given the trends of globalization and economic integration in East Asia, there is significant potential for the small and medium enterprise (SME) sector to increase its contribution to the region's development through greater participation in global value chains. However, multiple market failures exist with regard to the development of SMEs and local entrepreneurship. These risks can be mitigated by proper policy measures such as strengthening technological and human resource capabilities through better networking and facilitating access to financing for SMEs. Despite many distortions and inefficiencies in implementing regional economic integration schemes in East Asia, there are many cumulative positive effects contributing to the emerging trend internationalization of SMEs in the region. This process can be significantly strengthened by creating a positive business environment through the standardization of products and services, rules and regulations, and a seamless market infrastructure in the region.internationalization SMEs; regional development policies; regional market failure

The Role of Export-Driven New Ventures in Economic Growth: A Cross-Country Analysis

We investigate the relationship between a country’s prevalence of new ventures and its rate of economic growth, while distinguishing between export-oriented new ventures and domestic new ventures. It is generally acknowledged that new venture creation as well as export activity may both be important strategies for achieving national economic growth. However, to our knowledge no attempt has been made to empirically investigate the role of export-driven new ventures in economic growth. We focus on the national level and use data from the Global Entrepreneurship Monitor for a sample of 36 countries. Our results suggest that a country’s prevalence of export-driven new ventures is significantly positively related to economic growth, whereas the prevalence of new ventures that focus exclusively on domestic market sales shows no significant relation to national growth.

The internationalization profiles of Portuguese SMEs

Given the (increasing) view point that firms’ internationalization strategy is the unique path to overcome the Portuguese dismissal economic growth, the present paper offers a comprehensive picture of the internationalization behavior of Portuguese SME, constituting therefore an important tool for political action. On the basis of the literature review and the factorial and cluster analyses performed, we propose three main segmentation criteria, one (‘Whole encompassing segmentation’: Experienced Medium Low-Tech firms; Low skill, Low-Tech firms; Young High-Tech firms) based on language skills, SME business experience, foreign market dependency, introduction of organizational innovation, exporting to ‘High income countries’ and education level of executive teams. The second segmentation proposal (‘Intermediate segmentation’: Young small-sized firms; Young micro-sized firms; Mature small-sized firms; Young medium-sized firms; Mature medium-sized firms; Foreign equity firms; Highly productive firms) has as criteria the firm size, the SME export intensity and industry. The last segmentation proposal (‘Parsimonious segmentation’: Medium-sized firms; Small-sized manufacturing firms; Micro-sized firms; Non-manufacturing small-sized firms; Export active small-sized firms; Potential exporters; Promising exporters firms) is based on SME size, business experience, foreign capital presence, and average productivity. Given the need for a parsimonius segmentation criterion, we convey that the most adequate segmentation criterion is the one combining SME size, export intensity and industry. This restricted number of criteria does not, however, affect the quality of the proposed SME segmentation, and has the advantage of being stasticaly adequate and user/cost friendly.Internationalization performance determinants, Portugal, Segmentation, SME

SMEs: ERP or virtual collaboration teams

Small firms are indeed the engines of global economic growth. Small and Medium Enterprises (SMEs) play an important role to promote economic development. SMEs in the beginning of implementing new technologies always face capital shortage and need technological assistance. Available ERP systems do not fulfil the specific requirements of Small firms. SMEs has scarce resources and manpower therefore many SMEs don?t have the possessions to buy and operate an ERP System. On the other hand competition and competitiveness of SMEs have to be strengthened. This paper briefly reviews the existing perspectives on virtual teams and their effect on SMEs management. It also discusses the main characteristics of virtual teams and clarifies the differences aspects of virtual team application in SMEs. After outlining some of the main advantages and pitfall of such teams, it concentrates on comparing of ERP and virtual collaborative teams in SMEs. Finally, it provides evidence for the need of ?Software as a Service (SaaS)? where an application is hosted as a service provided to customers across the web for SMEs as an alternative of ERP. It has been widely argued that ERP disadvantage in SMEs such as administrative expenditure and cost, isolated structure, severe lack of software flexibility, insufficient support of SMEs business and high operating cost, lead SMEs to use virtual collaborative team which is net work base solution