R&D Networking and Value Creation in SMEs

Nader Ale Ebrahim
University of Malaya - Department of Engineering Design and Manufacture, Faculty of Engineering

Shamsuddin Ahmed
University of Malaya (UM)

Zahari Taha
University of Malaya (UM)


June 30, 2008

Seventh conference of Industries and Mines R&D Centers - R&D and Network Value Creation, Tehran, Iran, June 29-30, 2008

Abstract:
Research and development (R&D) activities are fundamental drivers of value creation in today’s technology-based Small and Medium enterprises (SMEs). Seemingly, a successful R&D is a task of innovation processes and development of R&D networks with allied companies. There is a perceived lack of understanding regarding the importance of SMEs and their need to continuously enhancing their technological capabilities for the purpose of establishing them in dominant market positions. This article presents R&D network issues from the perspective of their impact on value creation in SMEs. The fundamental trend to enable SMEs towards creation of new knowledge and diffuse in and transfer that to other SME''s could be achieved by developing of collaborative environments and networks to increase their innovation capabilities as a single unit as well as the capabilities of the network as a whole through collective learning. SMEs seem to be the appropriate units to behave like network nodes because of their lean structure, adaptability to market evolution, active involvement of versatile human resources, ability to establish sub-contracting relations and good technological level for their products. SMEs not only shape the larger outcome, but also constrain actions of the state and MNCs in demand-responsive, buyer-driven networks. The objective of this article is the notice to creation of a network of SMEs that are geographically dispersed but virtually linked so that the participating members focus on their specialized tasks yet also share their knowledge and experience on resources to create an agile structured and flexible enterprise.

Keywords: R&D, SMEs, Network, Value creation

SSRN-R&D Networking and Value Creation in SMEs by Nader Ale Ebrahim, Shamsuddin Ahmed, Zahari Taha