Measuring R&D Demographics to Assess the Potential for Technological Innovation of SMEs in India

Abstract

“Innovation is one of the best-known indicators of organizational competitive advantage. However, little is known about the innovation behavior of SMEs in developing countries. The capacity of SMEs to be lean, flexible and agile makes their potential for innovation, high. Their R&D demographics is a good indicator of whether they will be potentially innovative or not. It is with this aim that we studied the R&D characteristics of Indian SMEs. The survey methodology was used. The questionnaire method was used for data collection. A sample of 55 Indian SME organizations in the pharmaceuticals, information technology, machine tools and precision tools sectors were surveyed. The metrics used to measure R&D demographics included spread of R&D activities within the SMEs, R&D expenditure of the SMEs, education levels of the SMEs, collaborations of the SMEs for technology acquisition and clients of the SMEs between foreign and Indian markets. Implications and policy suggestions are also discussed.