The effectiveness analysis of a supporting program for SMEs' R&D planning based on innovative capability audit tools

Abstract

South Korea's Small and Medium sized Enterprises (SMEs) play a vital role in the national economy but there is a big gap between SMEs and large firms in terms of their revenues. In order to balance the national economy, it is required to narrow the gap between SMEs and large firms through the innovation promotion policy for SMEs. Since the end of 1990s, South Korea has practiced some policies, which are based on National Innovation System (NIS), to incubate technology-intensive SMEs. In this study, we analyzed the effectiveness of the South Korea government's supporting program for SMEs' R&D planning using the innovative capability audit tools. The innovative capability audit tools are useful to evaluate the policy for R&D planning support for SMEs. We found that the innovative capability has a strong relationship with the sales of SMEs. On the other hand, the capability has a negative relationship with the number of employees, the amount of R&D investment or the number of IP.