Technology outsourcing in manufacturing small and medium sized firms: another competitive resource?


O’Regan, Nicholas and Kling, Gerhard (2011) Technology outsourcing in manufacturing small and medium sized firms: another competitive resource? R&D Management, 41, (1), 92-105. (doi:10.1111/j.1467-9310.2010.00626.x).

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Description/Abstract

Based on a sample of UK manufacturing SMEs in the engineering and electronics industry, the study identifies firm and industry-specific factors that stimulate R&D outsourcing and assesses the impact of R&D investment and outsourcing on profitability. The findings indicate that (1) R&D investment fosters profitability, (2) firms with lower turnover spend less on R&D, (3) current R&D does not explain innovation measured by revenues from new products and patents, (4) smaller firms with lower R&D investment levels tend to outsource R&D; (5) outsourcing is not inferior in terms of product innovation. Hence, outsourcing can enhance profitability – albeit the benefit of outsourcing decreases with firm size. Managers of small firms should consider outsourcing R&D, as this can reduce R&D expenditure and lead to the more effective use of resources as well as achieving a similar degree of product innovation with resultant increases in profitability

Item Type: Article
ISSNs: 0033-6807 (print)
1467-9310 (electronic)
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Divisions: University Structure - Pre August 2011 > School of Management
ePrint ID: 176737
Date Deposited: 11 Mar 2011 08:40
Last Modified: 27 Mar 2014 19:23
URI: http://eprints.soton.ac.uk/id/eprint/176737

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