Small-Medium-Enterprises (SMEs) play a critical part and are an important contribution to the economy in Australia, and the imperative to innovate has been greater than ever in a globalized economic setting. This research explored a number of questions surrounding SMEs, their innovation practices and the policy that influence them. This research builds on prior studies and addressed a significant gap within the literature in a descriptive and explanatory way.
The statistics captured on innovation often provide a mixed view on the greater benefits in the form of increased productivity and higher value for the goods and services we produce. Though the value of statistical information and analysis is beneficial, it does not provide an in-depth view of the effects and benefits on small businesses, their owner(s) and the resultant innovation outcomes. The question may be posed, 'what actually happens and how does it (innovation) actually work in reality?'
Each agent in the innovation process brings its own capabilities and strengths to this process. Broadly speaking, business brings the commercial and technological know-how, capital and access to distribution and markets, educational institutions the intellectual capital and linkages (a key driver for this research), while the key inputs from government are policy leadership, strategic focus, and overarching vision that enable these other agents and their capabilities to be 'joined together‘ into a coherent whole. In principle, these resultant interactions between these variables (business, education institutions, government) mentioned above must have delivered some contribution towards effective innovative solutions and practices in SMEs.
This research reviewed and identified, through a case study approach with a series of in-depth qualitative data collection, analyses and discussions, barriers to innovation in micro-regional SME in Australia, and outlines recommendations for how these can be overcome. In essence, the research aims to provides a deeper insight into what actually happens and why it happens; factors affecting innovation and technology transfer (I&TT) in regional micro-manufacturers, and describes an intervening investigation into the I&TT process in the SME sector within a University-Industry collaboration context. It is evidenced that this research field is well contributed by the large number of published research articles. However, the literature suffers from a lack of understanding of the meaning and reasons for the drivers for innovation. Hence, the principal purpose for this research to be undertaken.
Four research questions were developed and these are presented in the form of propositions:
• Proposition 1: Failure and Novelty is mutually inclusive and is the governing principle behind innovation policy (ie. systematically grasping opportunities in the midst of change while minimising failures)?
• Proposition 2: SMEs are not effective and efficient beneficiaries of innovation policies and their outputs (such as research, education and business support)?
• Proposition 3: To what extent do influencing macro-environmental factors affect the decisions of firm‘s manager to innovate?
• Proposition 4: Regional universities can play an instrumental part in delivering support mechanisms for innovation within a networked cluster?
In doing so, it explores and reflects on the innovation and technology transfer experience within a micro-manufacturer, obtained through embedment of one of the authors in an SME firm. The research initially focused on the manufacturing factors such as increasing productivity through work study and work-flow analysis, and introducing semi-automation and flexible manufacturing methodology. As the project progressed, however, several non-manufacturing factors were identified as major influences in the I&TT process within the targeted micro-manufacturer. The ability for firms to progress in improving the manufacturing factors is often dependent on these factors, which are categorized as very personal and business related (rather than technical related). The underlying project on which the work described is based involved a SWOT analysis on the business, learning and discovering the obstacles and barriers for I&TT, seeking and proposing ways to reduce it, and modeling the overall I&TT process within micro-manufacturers in regional areas, and termed Regional Knowledge Diffusion (RKD) model. This model developed through this research can be used as a conceptual framework for developing future policies for encouraging innovation and technology transfer within a university-industry context within the Small-Medium-Enterprise sector.
Future research should aim at extending this qualitative research to a more diverse group of SMEs and importantly gaining a better understanding of the value systems, across a range of industries in a range of geographical locations in Australia and elsewhere, in order to evaluate the extent of and commitment of this sector to innovation at a wider level, and to better understand how this industry sector might benefit from closer links with universities and researchers.