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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), pp. 92-105. (doi:10.1111/j.1467-9310.2010.00626.x).

Record type: Article


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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Published date: January 2011
Organisations: Management


Local EPrints ID: 176737
ISSN: 0033-6807
PURE UUID: 34b6dc7c-889b-4058-aa2c-cf7b86d906c4

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Date deposited: 11 Mar 2011 08:40
Last modified: 18 Jul 2017 12:07

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Author: Nicholas O’Regan
Author: Gerhard Kling

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