Importance of Technological Innovation for SME Growth - Evidence from India
M. H. Bala Subrahmanya, M. Mathirajan & K. N. Krishnaswamy
#2010-007
This paper probes the drivers, dimensions, achievements, and outcomes of
technological innovations carried out by SMEs in the auto components,
electronics, and machine tool sectors of Bangalore in India. Further, it
ascertains the growth rates of innovative SMEs vis-à-vis noninnovative
SMEs in terms of sales turnover, employment, and investment. Thereafter,
it probes the relationship between innovation and growth of SMEs by (i)
estimating a correlation between innovation sales and sales growth, (ii)
calculating innovation sales for high, medium, and low growth innovative
SMEs and doing a one-way ANOVA, and (iii) ascertaining the influence of
innovation sales, along with investment growth and employment growth on
gross value-added growth by means of multiple regression analysis. The
paper brings out substantial evidence to argue that innovations of SMEs
contributed to their growth.
Keywords: technological innovations, sales growth, auto components,
electronics, machine tools, Bangalore
JEL classification: L25, L26
UNU-MERIT Working Papers
ISSN 1871-9872
