Project success of small and medium-sized firms in European publicly funded research and development
Tala, Mika Samuel
Permanent address of the item is
Pienten ja keskisuurten yritysten projektin onnistuminen eurooppalaisissa julkisrahoitteisissa tutkimus- ja kehitysprojekteissa
This study is concerned with the business development of small and medium-sized enterprises (SMEs) through their participation in the international R&D collaboration projects funded by European Commission and related sources. SMEs receive increasingly more attention from policymakers as they create the most employment. European Union is targeting extensive innovation support for SMEs and many individual countries also have their own SME support policies. This study examines the business development and the factors explaining the success for SMEs which have participated in these publicly funded projects. Based on literature, the study creates a model on the success of SMEs’ publicly funded projects and identifies 13 hypotheses on its antecedents. Project success is measured in terms of innovation success criteria identified based on the literature review. The associations between variables are hypothesized based on literature and further tested by statistical analyses. The target group of the study is more than 10 000 European SMEs which have participated in the Seventh Framework programme (2007 to 2013) and Eureka programmes including Eurostars (2004 to 2014) with the main focus in 11 European countries. The final sample consists of 711 SMEs. The main business outcomes SMEs can attain in the projects are shorter time for innovations, new or improved products, new recruitment, higher sales from market novelties, improved R&D, improved human capital, and encouraging more fundamental R&D. The study was capable to provide some implications for research and practice. The findings show that knowledge transfer has the strongest impact on project success and it should therefore be promoted by the project participants. Money and capability to apply external knowledge were important but have no association with project success. The study also found out that previous experience in similar projects, often favored by funding agencies, is mainly important to be successful in networking. The findings also show that experienced limitations of knowledge can lead to more experienced benefits with networking and knowledge transfer in the projects. The findings regarding to negative sides of the projects suggest that SMEs should avoid participating in irrelevant projects and projects with too extensive project scale with respect to their resources. The study also indicates that problems with administration constrain the chances to attain benefit with knowledge transfer, networking and enhanced brand in the projects.