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Born Global Innovators: The innovative capabilities of internationally active SMEs

abstract The past ten years have brought forth an impressive volume of research on internationally active small and medium enterprises (SMEs). Throughout this paper we will refer to them as 'born globals' (BGs), being aware of the multitude of other denominations (see Sharma and Blomstermo, 2003). However, research on these firms is fragmented and lacks a cohesive theoretical framework. As of today, the field of international entrepreneurship that analyses such firms is lacking in solid theoretical frameworks, a deficiency that may cause fragmenta-tion in this area (McDougall and Oviatt, 2000). Gaps remain in terms of the development of normative implications for international new ventures, and in the elaboration of new theoreti-cal insight for the development of practitioner-oriented planning frameworks (Autio, 2005).

In special, research is surprisingly short on the international innovatory activities of BGs, as well as on the protection of the intellectual property rights of their innovations. This is sur-prising, because it is precisely their innovatory power that enables these small firms to exist at all by addressing high-technology market niches, and, specifically, to be able to international-ise their operations on the basis of this innovatory power. Thus, these small firms make a large contribution to the competitiveness of a national economy, an argument that especially applies to Switzerland whose economy is characterised by a very high proportion of SMEs.
Given the often-quoted 'liability of smallness' (Aldrich and Auster, 1986) - that is, the re-source constraints and limited strategic options SMEs are presumed to suffer from -, it would be especially interesting to know how some BGs have managed to internationalise their inno-vatory activities, and how some BGs have managed to effectively protect the intellectual property rights of their innovations - both despite the 'liability of smallness'. We have made a preliminary exploration of this area to confirm its relevance, however, this exploration has been conducted on a 'there is', rather than on a 'because of' basis, so that we would need to investigate these issues much more in detail to arrive at a clear picture of the causal connec-tions to be able to contribute further to theory development. The potential for new insights and theory development is high, because literature on international entrepreneurship has not yet addressed these issues.

While the international innovatory activities of large multinational corporations (MNCs) have received some attention since the early 1990s, the topic of international innovatory activities of BGs is, to the best of our knowledge, almost totally absent in literature. This gap is even widened by a lack of consideration of European BGs, as most empirical contributions in in-ternational entrepreneurship literature have analysed samples from the USA and from Com-monwealth nations, although European economies are structurally characterised by a strong presence and importance of BGs. This is especially the case for the Swiss economy, the struc-ture of which is made up to 99.5% of SMEs (Swiss Federal Statistical Office, 2005). Espe-cially export-oriented high tech SMEs are a major source of Switzerland's economic growth.

Given this gap in theory and these empirical phenomena, we feel that there is a need for an inductive, hypothesis-generating approach. Specifically, we want to identify which organisa-tional capabilities do enable BGs to internationalise their innovatory activities and to protect the intellectual property rights of their innovations despite their lack of resources and 'liability of smallness'. Thus, we also address the justified lament that there has been very little empiri-cal research aimed at uncovering the actual bundles of capabilities that make SMEs interna-tionalise early (Knight and Cavusgil, 2004).
keywords International entrepreneurship, SME, international R&D, innovation, firm capabilities
type fundamental research project
status completed
start of project 2007
end of project 2007
additional informations
topics International entrepreneurship
methods Qualitative und quantitative Methoden
contact Marcus Matthias Keupp