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With deregulation and globalization, and the direct impact of these de-velopments on economies worldwide, it has become necessary for Chinese authorities to consider an approach that would further attune its eco-nomic engine toward sustained growth. This paper argues that certain sectors of the economy—in particular, the small and medium enterprise...
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... argue that, in order to reap the full benefits of economies from clus- tering, the process of economic development needs to emphasize a collaborative process between the government, private firms, and research and educational institutions (Porter 2004). This evolution is summarized as Figure 3. There is increasing empirical evidence that cooperation among SMEs that share business interests such as markets, products, and infrastructure needs is more likely when these enterprises operate in close physical proximity (Duranton 2005;Henderson 2003). ...
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The purpose of this paper is to explain how national innovation systems may transform innovation input into innovation output in different counties. Using the Global Innovation Index (GII) we discuss what can be understood by the term ‘innovation’ and how it is translated into the national level. The research question is founded on the assumption t...
With deregulation and globalization, and the impact of these developments on economies worldwide, it has become necessary for the PRC authorities to consider an approach that would further attune its economic engine toward sustained growth. This paper argues that certain sectors of the economy [in particular, the small and medium enterprise (SME) s...
Citations
... High technology SMEs generally form part of subcontracting systems . Kanamori and Yang (2007) state that the existing clusters in China are limited to producing low-technology products (e.g. textiles and garments) for the mass-markets. ...
... Sidik (2012) state that, for SMEs to be competitive, they need to offer products or services with some basic level of innovation relative to its competitors. Kanamori and Yang (2007) note that a nation's development of technological capability is primarily based on competing resource utility -allocating and leveraging resources for existing and new technologies that advances the overall competitive capabilities of the industries of the nation. ...
... SME clusters can also develop spontaneously without government intervention (Mourougane, 2012). Kanamori and Yang (2007) note that firms in a cluster benefit from the advantages of agglomeration and external economies of scale; increasingly. Clusters avails access to resources otherwise out of reach, economies of scope (common marketing and distribution channels), learning, specialization and improved interaction with support institutions. ...
SMEs constitute an essential part of many economies, and some are attributable to necessity due to higher levels of unemployment, others from identification of gaps in the market. However, many still hang around at a low level of development, with only a portion demonstrating the potential to grow further. Besides the hindering factors that are known, previous research has proven that SMEs have the potential to grow through exports, innovation, and technology. It could be that the entrepreneur’s worldviews are limiting the firms' strategic directions or the limitations are more external to the SME.
The primary objective of the study was to follow how South African SMEs in the Technology Sector understand and think about their growth. The study followed a qualitative approach, where data from various entrepreneurs was collected using semi-structured interviews. The thematic analysis framework was used to analyze the data.
Analyzed results revealed that technology is a potent source and medium of, and contributor to, growth, but in many cases, it seems too expensive for SMEs to commit to and get behind and going. The results also demonstrated that SMEs to grow, they must take innovation and creativity to the next level, which would also solve and overcome typical problems faced and lastly, entrepreneurs may require further development and higher levels of expertise. They demonstrate general and basic business sense and understanding, yet there is arguably room to improve on further and integrate this to higher levels. A common manifestation of this would be in the competitive advantages and unique value propositions that they construct.
... In United Kingdom (UK), United States of America (USA), and Canada, the definition of SMEs is based on the number of employees and turnover, while in Japan and China, it is based mostly on the type of businesses, paid-up capital and the number of paid employees. In UK, an SME is conceived as a business with an annual turnover of ₤2million or less, with fewer than 200 paid employees, while in USA, an SME is seen as that type of business in the manufacturing sector, with fewer than 500 regular employees or wholesaling and retailing sectors with fewer than 100 regular employees and an average annual operating capital of less than $6million (Kanamori, Lim, & Yang, 2006). ...
Small and medium-scale enterprises (SMEs) have been identified as the engine and foundation of rapid industrial growth. Unfortunately, the potentials of the SMEs to accelerate the process of industrialization in Africa have been undermined by numerous constraints, prominent among which is lack of access to finance. The study examined the impact of SMEs financing on industrial growth in Africa using panel time-series data from all the 15 ECOWAS countries from 1986 – 2016. In implementing the panel data regression, the study engaged in panel unit root using the LLC, IPM, Fisher-type ADF and PP tests, and co-integration tests using the Kao residual-based and Johansen- Fisher combined tests. The study also placed adequate control for any unobserved heterogeneity among the ECOWAS countries, using a well-specified fixed effect in exploiting the time dimension present in the dataset. The result shows that SMEs output significantly affects industrial growth positively while the Deposit Money Banks’ credit to SME’s do not have significant impact on industrial performance during the review period. The result further reveals that interest rates have a significant negative impact on industrial growth. Based on these findings, the study recommends that monetary authorities in ECOWAS countries can encourage easy access to finance by making available interest-free loans using microfinance institutions.
... Organizational innovation is regarded as the adoption of new organizational method in business activities, or the changes of company current workplaces and external networks (Bozkurt and Kalkan, 2014 [3]; Antonioli et al., 2004, p.19) [2]. Based on two types of innovation (product innovation and process innovation) mentioned above, Wong (1999) pointed out four modes of innovation learning: the product technology pioneering mode, the process capability pioneering mode, the fastfollower innovation mode, and the application specialist mode (Kanamori et al.,2007) [8]. ...
... Ultimately, this will become own indigenous capability with the simultaneous maintenance of technological leadership. For instance, in the 1990s, the manufacturing industry of Japanese vehicle achieved the successful accomplishments (Kanamori et al., 2007) [8]. The generic strategies provided by Porter (1990) [9] accordingly accompany these four modes of innovation learning mentioned above. ...
... Ultimately, this will become own indigenous capability with the simultaneous maintenance of technological leadership. For instance, in the 1990s, the manufacturing industry of Japanese vehicle achieved the successful accomplishments (Kanamori et al., 2007) [8]. The generic strategies provided by Porter (1990) [9] accordingly accompany these four modes of innovation learning mentioned above. ...
In China, small and medium enterprises (SMEs) play a crucial role in economic development and social wealth in terms of GDP growth, employment creation and poverty alleviation. In the age of technology and information, innovation has been regarded as one of the most significant drivers for the growth and prosperity of SMEs. Therefore, it is necessary for SMEs to implement innovation strategy, which would help them to initiate new products, adopt new processes and increase their competitiveness. From this point of view, this study attempts to identify the innovation situation of Chinese SMEs with regard to innovation type as well as innovation strategy. The research data is collected through structured questionnaires and semi-structured interviews from SMEs of manufacturing industry in Shanghai, China. According to the data results, process innovation and marketing innovation are adopted more frequently than product innovation and organizational innovation by Chinese SMEs. This study also demonstrates most SMEs in China implement free-riding strategy; some of them adopt niche strategy; and few SMEs practice cluster strategy. Although innovation is increasingly important for Chinese SMEs, their implementation of innovation strategy is not highly effective and successful.
... China is a relative late comer to modern industry but a highly successful one. The rapid growth of dynamic SMEs is one of significant achievements of this overall macro-economic reform (Kanamori et al., 2007). Moreover, as a vital driver behind the economic boom in China, Chinese SMEs make great contributions to GDP growth and employment creation. ...
p>Innovation has been regarded as one of important impetuses to gain competitive advantages and achieve sustainable development for small and medium-sized enterprises (SMEs) in the past thirty years. However, SMEs in China have currently confronted a lot of problems impairing their innovation performance. This study aims to identify the main challenges hindering successful innovation of Chinese SMEs. Based on the previous academic studies, there are five research variables are developed and evaluated: lack of financial support, inadequate research and development (R&D) activities, the shortage of technical and skilled employees, weak entrepreneur orientation, improper governmental and legal environment. Furthermore, the primary data are collected by structured-questionnaires from 120 SMEs in Beijing. According to the research results analyzed by SPSS, it reveals that lack of financial support and inadequate R&D activities are major challenges for Chinese SMEs to achieve innovation. The shortage of technical and skilled employees as well as the improper governmental and legal environment is other barrier. Therefore, more responsibilities and actions should be taken by the government and SMEs themselves to enhance the innovation capability of Chinese SMEs. On the other hand, only one factor—weak entrepreneur orientation, is not regarded as a key challenge. This indicates Chinese entrepreneurs have increasingly realized the significant role of innovation played in the survival and long-term prosperity of SMEs recently.</p
... As a consequence, many Chinese SMEs find that public assistance programmes and services are inefficient and not always suited to their needs (Liu 2007). In particular, these asymmetries have been found to have an inhibitor effect in the growth of SMEs in China (Kanamori et al. 2007); also the lack of information and knowledge about markets and consumers constitutes an obstacle in the process of SMEs' expansion (Cardoza and Fornes 2011). These market and state failures have led firms to rely on interpersonal relationships (guanxi) to overcome them and build trust (Bhagat et al. 2010, Cai et al. 2010. ...
Despite small- and medium-sized enterprises' (SMEs) significant contribution to China's social and economic development, very little has been written about the influence that public policies (i.e. public funding priorities and regulatory measures) may have on the first stage of international expansion of Chinese SMEs. To help fill this gap, the article analyses five main factors related to public policies and services affecting Chinese SMEs' internationalization: access to public financial resources; participation of the government in ownership; access to public procurement contracts; adverse regulatory and inconsistent legal frameworks; and public assistance on information and knowledge about markets. The main conclusion is that SMEs appear to base their international expansion on private capabilities, rather than on support from the government; in addition, the perceived barriers for the international expansion of these firms may be mainly internal, rather than institutional.
... In particular, the lack of information and knowledge about markets and consumers constitutes a serious obstacle in the process of SMEs' expansion (Cardoza & Fornes, 2011a). In this respect, Kanamori et al. (2007) argue that asymmetries are a significant inhibitor of SME growth in China, especially with respect to the financial constraints that they face. ...
... Also, as pointed out by several authors, SMEs find it difficult to obtain bank loans due to weak management and governance structures, poor accounting and information systems, and high business risks(Liu, 2007;Yuan & Vinig, 2007). 6 Specifically, in 2002 the National People's Congress Standing Committee enacted the SME Promotion Law to reduce institutional barriers, offer legal protections to investors, promote specific industries, and create technology-based companies(Chen, 2006;Kanamori, Lim, & Yang, 2007). Also, in 2006 the SME Growth Project was adopted mainly to promote policymaking, training, supervision and funding for SMEs. ...
... In order to promote SMEs' development through public policies and programmes, the Chinese government has created several administrative entities at national and regional levels such as the National Development and Reform Commission, China Coordination Centre for Cooperation of SMEs with Foreign Countries, China Association of SMEs, and a local SMEs department in every province(Liu, 2007).8 As noted byKanamori et al. (2007), "while the policies sketched out in the Law seek to improve the overall business environment and increase the expansion potential of SMEs, it does not actually address the longer-term development of SMEs within the framework of the existing NIS (National Innovation System)." 9 For instance, Jiangsu Province favoured collective firms (TVEs) and discriminated against domestic private firms mainly through heavier restrictions to credit access(Brandt & Li, 2002;Huang & Di, 2007;Wei, 2002). As explained byHuang and Di (2007), the Sunan Model prevailing in Jiangsu Province was characterized by strict government control of firms including ...
Despite SMEs’ significant contribution to China’s social and economic development since the market-oriented reforms in the 1980s, very little has been written about the influence that public policies may have on the expansion of Chinese SMEs. To contribute to fill this gap this paper analyzes five main factors related to public policies affecting Chinese SMEs’ internationalization: i- limited access to financial resources, ii- participation of the government in ownership, iii- access to public procurement contracts, iv- adverse regulatory and inconsistent legal frameworks, and v- availability of assistance on information and knowledge about markets. The data was collected from 497 SMEs and analysed using multivariate regressions. The findings show that SMEs in the sample are basing their international expansion on “private” capabilities (which includes transfers from external private sources) rather than on the support from the government (the case for many MNCs). In addition, the perceived barriers for the international expansion of these firms are mainly internal rather than institutional, i.e. no institution-based barrier seems to prevent Chinese SMEs to expand internationally. And there are no main differences in the regions of China where companies are based in terms of public policies or institutions.
... They do not participate in supportive production chains involving effective collaboration between firms and service institutions; neither do they compete on the improvements in product, process, technology, and organizational functions such as design, logistics, training and marketing in a globalizing economy. (Kanamori, Lim & Yang, 2006) Those problems become the obstacles and hinders for firms which intend to expand globally or being internationalization. On the other hand, regardless of these failures and disadvantages, Chinese firms tend to believe in the Chinese wholesale market model and tend to use it again and again. The emergence of new "Chinese towns" or Chinese distribution centers in Europe continent such as in Spain, Italy, Portugal, and Poland etc becomes a trend of entering foreign markets for Chinese companies. ...
China managed to built-up a working market economy transforming itself into dominant player on global scale and put more emphasize on innovation-driven growth. In the course of this unprecedented process, Chinese Small and Medium sized Enterprises (SMEs) have established in huge numbers and become the most dynamic actors in the market economy. They have significant role in the domestic economy in profit creation, employment absorption, taking into practice different types of innovations largely contributing to the social stability and raising of well-being of the local communities. Furthermore, internationalization has also become important factor for the continuously developing SMEs in China. Beyond the observed negative tendencies-significant shrinkages of the SME's profits-can be many different reasons. The central government has tendency to prioritizing the large size state enterprises in certaing industrial and service sectors, the insufficient size and frequency of the strategic innovations largely due to the lack of know-how, information, skills, competencies, attitude, network-based co-operations and experience of domestic and international markets. These also pointed out the relevance on the strategic innovation and how to impact on the product and process innovation on the SME's technologies, business models, reshaping the corporate cultures and values as well to stop and reverse his negative trends. It means a defined product strategy, adequate financial and human resources, New Product Development (NPD) R&D resources, high quality project teams, senior management commitment, innovative environment and culture. Cross-functional teams and top management should responsible for the implementation. This review paper is aiming to give a comprehensive landscape about the current situation of and the special features of the Chinese SME sector and the obstacles that can hindering or slow down their successful innovation processes. These challenges are particularly difficult for SMEs with smaller scale and weaker risk tolerance. Chinese domestic firms have comparative advantages, such as cheap labour resources, better knowledge about Chinese local market comparing to foreign MNEs from developed countries. Facing strong competition both from large-sized State Owned Enterprises (SOEs) and foreign Multinacional Enterprises (MNEs), Chinese SMEs should pay more attentions to indigenous innovation by taking advantage of Chinese huge domestic market.
In contrast to Pakistan, other countries in the region like China, Bangladesh, Malaysia, and Turkey were able to harness the potential of SMEs through coherent and robust mechanisms that allowed the working of state institutions in a synergetic way. The strong SME support mechanism adopted specifically by China is an example for Pakistan to bridge the widening income gaps through promoting entrepreneurship and small businesses, generating jobs, and helping to alleviate poverty. Bangladesh and Malaysian models also offer pertinent lessons that may be replicated for steering the growth of SMEs in Pakistan. Malaysia and Turkey are two developing countries that have displayed considerable achievement in their economic growth and reduction in unemployment through the focused development of businesses in the SMEs category. The current study, therefore, will analyze the Turkish and Malaysian model in comparison to Pakistan and draw some pertinent lessons from these SMEs models for Pakistan to follow. Introduction:
China is at the critical cross road of transforming its development model from a resource and low-tech based one towards a more knowledge and technology intensive one. Evidence shows chat Chinese enterprises, especially SMEs, are facing serious constraints in terms of human resources, technology acquisition and absorption, and access to finance and various innovation services. How to overcome these constraints is the key focus of an effective innovation strategy. This paper is intended to examine these key constraints through a diagnostic analysis, and to provide relevant policy suggestions and good international or domestic examples in various areas.
