Technology outsourcing in manufacturing small and medium sized firms: another competitive resource?
Technology outsourcing in manufacturing small and medium sized firms: another competitive resource?
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
92-105
O’Regan, Nicholas
43e5cfdf-51fb-4362-98ff-58e2ce3c8f5c
Kling, Gerhard
feea1f9e-c49a-4d9c-b688-ec839cef9624
January 2011
O’Regan, Nicholas
43e5cfdf-51fb-4362-98ff-58e2ce3c8f5c
Kling, Gerhard
feea1f9e-c49a-4d9c-b688-ec839cef9624
O’Regan, Nicholas and Kling, Gerhard
(2011)
Technology outsourcing in manufacturing small and medium sized firms: another competitive resource?
R&D Management, 41 (1), .
(doi:10.1111/j.1467-9310.2010.00626.x).
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
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Outsourcing.doc
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Published date: January 2011
Organisations:
Management
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Local EPrints ID: 176737
URI: http://eprints.soton.ac.uk/id/eprint/176737
ISSN: 0033-6807
PURE UUID: 34b6dc7c-889b-4058-aa2c-cf7b86d906c4
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Date deposited: 11 Mar 2011 08:40
Last modified: 14 Mar 2024 02:40
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Author:
Nicholas O’Regan
Author:
Gerhard Kling
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