R&D collaboration by SMEs in ICT industries: opportunities and limitations

Abstract

Globalisation has systemically affected the way firms undertake innovation. First, there has been a growing use of non-internal technology development, both by outsourcing and strategic alliances. Second, there has been a increasing of cross-fertilization of technologies, such that products are increasingly multi-technology. This is particularly so in the ICT sector. These developments have created both opportunities and threats for the SME. On the one hand, there has been a proliferation in the number and types of SMEs, and enhanced their ability to compete more successfully with their larger counterparts . On the other hand, some of the benefits of globalisation have accrued equally to both groups of firms. This is particularly so for the 'traditional SME' and is associated with the increasingly paradigmatic and maturing nature of the ICT sector. Although SMEs have the advantages of being flexibility and rapid response to change, there are also disadvantages due to their absolute size limitations which may have been enhanced due to increased cross-border competition.