Promoting Innovation in SMEs

Innovation is the key for productivity and long-term growth. Supporting innovation in SMEs can foster inclusive growth. SMEs are on average less innovative than large enterprises, but some of them can be or become highly innovative and can reach productivity levels above those of large companies. Companies which develop and use their internal strategic resources effectively (e.g. managerial and workforce skills, ICT, R&D, etc.), and collaborate with external partners in the innovation system, have better innovation performance.  

SMEs however often face larger barriers on capital and labour markets than larger established businesses. It is for that reason that multiple policy measures have been adopted to target those firms and their opportunities to engage in innovation. Authorities can support innovation in SMEs by fostering a sound business environment, helping them to fund and develop and use their internal strategic resources effectively, and building an innovation system including supporting services and that is effective in the commercialisation of research and inclusive of a large range of SMEs.




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