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The Status and Promotion Strategies for SMEs : Focusing on Management of Technology

Author Ji-sung Hong, Chang-yong Han Date 2014.12.29 Page 192

Domestic Small and Medium sized Enterprises(SME)s’ innovation investments have decreased due to slowdown of national growth, increased uncertainty of investment, and worsened financing conditions. The government has conducted substantial R&D support in order to promote technological innovation. Because of tax revenue shortages, it is becoming ever more important to enhance the effectiveness of the supports.

Technological innovation consists of sequential phases of planning, development, commercialization, and feedback. The outcome of technological innovation may depend on factors such as competency, method, resources and environment. Compared to large companies, SMEs show relatively low technological innovation performance due to lack of human resources, material resources, and development experiences.
Compared to other areas, the importance of Management of Technology(MOT) has attracted attention lately, as there are insufficient and improper directions of MOT. The government has emphasized the importance of MOT and expanded its support for technology consulting, R&D planning, technology management education and training, but the budget is insufficient and the number of supported companies is small.
In this study, by considering the problems of SMEs’ technology managements, cases of overseas developed countries and government policies, we propose directions and strategies to improve productivity.
We analyze the technical and commercial management activities of domestic SMEs. Regardless of the efficiency, the SMEs cite lack of human resources and funds as the main problems of innovation activities. In spite of the new and strengthened government supports, the R&D budget is still small, and there is a lack of political interest in comparison to other areas such as industry demands that may occur.
As for overseas developed countries, it has been found that they are striving actively for job creation by means of innovation and establishment. In particular, in the case of OECD governments and companies, due to the deterioration of the financial situation, they are exerting efforts to more efficiently carry out innovative activities.
In order to foster high technological innovation, the active role of SMEs is critical. Through the research results of domestic companies and developed countries’ innovation activities, we present some suggestions for the future direction and strategies to enhance the results of domestic SMEs’ innovation.
As for corporations, we propose the following directions and strategies: first, Technological innovation strategies should be suitable with internal and external conditions. Second, it is necessary to improve the coordination between related organizations within enterprises. Domestic SMEs have strengthened the communication within internal departments such as production, sales, marketing, and planning, but it is still far from satisfactory. Third, it is necessary to improve the harmony between the technical and non-technical innovation. Although technical innovation activities, such as product innovation, have been actively carried out, non-technical innovation, such as organization innovation, often remains deficient or is being performed separately. Fourth, there is a need for enhanced technological planning techniques to improve the productivity of innovation activities. The innovation activities should be carried out in harmony with the business strategy of the company. Fifth, it is necessary to improve productivity by diversifying the technology acquisition methods. There are a variety of ways of technology acquisition, such as unique development, joint development, and outsourced development; thus, it is necessary to adopt a method to suit the purpose and properties of the specific development.
Next, as for government, we also propose the following policy directions and strategies: first, the budget for MOT should be increased. Though the R&D budget has been increasing recently to stimulate technological innovation, it is limited to direct support, and the budget for indirect support or technology infrastructure is still lacking. In particular, almost every SME needs MOT so as to enhance technological development, but the government supports a few of them. Second, we should induce the awareness of the importance of MOT and spread it throughout the SMEs. Many SMEs still go about their R&D without any clear plan. Third, policy measures and actions should be designed to spread the idea of MOT. Fourth, the government must strengthen the MOT educational program. Furthermore, the government needs to find successful innovation cases, write practice guidelines and spread them throughout the SMEs, in order to induce the harmony between segmental innovations such as product innovation, process innovation, marketing innovation, and organizational innovation. Fifth, it is required to vitalize the industry-academic cooperation, as the government especially should highlight the role of private corporations. Sixth, it is necessary to widen the road to commercialization after innovation.