research-proposal(1).docx

Postgraduate Research MethodsAssignment Two - Research ProposalName:Wei XiongStudent Number: 089170959Programme:Innovation, Creativity and EntrepreneurshipIndicative subject area: Technological innovationShowcase:Huaguang Electronics Co. LtdWorking Title: Study on the evaluation of technological innovation capability of small and medium enterprises1. IntroductionWith the rapid development of the modern society, small and medium enterprises (SME) have played an important role in promoting economic growth and expanding employment. It is estimated by the research of China Briefing (2010) that currently there are approximately 42 million SMEs in China. While they are separately accounting for the proportion of the whole industrial enterprises as following: households accounted for 98.5%; employment accounted for 69.5%; total assets accounted for 4.85%; sales accounting for 57.1%; industrial and commercial taxes accounted for 43.2%. Therefore according to the figures it can be seen that SMEs not only have played a significant role in increasing economic incomes and expanding employment of China, but also they are forces of promoting the market economy and nurturing a large number of entrepreneurs. In fact, most of worlds leading companies become developed from the growth of small business through technological innovation. Such as Hitachi Company in Japan only began with engaging in import of electrical repair work for small electrical repair factory, they rapidly grow into world-class enterprise through technological innovation in video and telecommunication equipment. (Hitachi, ltd, 2010) Furthermore, the British tableware industry was impacted by imports tableware and cutlery industries almost wiped out in 70s of 20th century, but. Richardson Sheffield has benefited from the product innovation and process innovation in a long-term objective that the tableware in key technological areas had set up an enterprise core competency. (Cope, 1994) Therefore it has grown from a small tool business growth to the leaders of tableware industry There is no doubt that the success of these enterprises can be attributed to technological innovation, which is the most important driving force for the development of SMEs although firm size, assets and other factors are parts of competitive advantage in the market economy. Thus more and more entrepreneurs of SMEs have realized that the improvement of technological innovation abilities is a crucial factor for enterprise survival as well as their own rapid development. Unfortunately, many SMEs deemed that introducing high-tech talents and investing funds on Research and Development is an effective way to improve technological innovation capability without focusing on their own specific situation. (Kumar, 1997) As a result, it may lead to a waste of resources. Therefore it is necessary to correctly evaluate technological innovation capabilities in different companies by identifying key success factors and weaknesses which targeted responses to those problems. At this time, technological innovation capacity assessment is not just a simple collection of information but an evaluation of promoting capabilities of technological innovation in SMEs. In view of above reasons, this proposed research will hope to make some useful exploration by the evaluation of technological innovation capability in SMEs.2. Literature review2.1. The origin of technological innovation theoryAdam Smiths Wealth of Nations can be a masterpiece on the relationship between technological progress and economic growth. (Smith, 1999) His central idea is: the countrys wealth depends on the division of labour, which may be benefit for certain mechanical inventions. In that case, it will reduce labour input in the production for the sake of productivity. Consequently, technological progress is another important factor in promoting economic growth other than capital and labour force.J.A. Schumpeter had established his innovation theory on the status of economic development as the prerequisite. He understood that economic development is a change which is not imposed by external forces of economic system, but generated from its inner economic system within a spontaneous and discontinuous change, which is technological innovation. (Gedam, 1989) Specifically, its essence is that entrepreneurs re-combine factors of production in order to obtain the potential profit. But the profit can be acquired only through the innovative activities of enterprise or entrepreneur. In Schumpeters view, the capitalist economy will be developed due to innovation. When innovations appeared, it would inevitably lead to a wide range of social imitation resulting in innovate waves and clusters, which may raise economic development and prosperity. Furthermore, the economic development caused by innovation is discontinuous and unbalanced. As a result, it embodied the alternation of booms and busts. At this point, the development of the capitalist economy is based on cyclical fluctuations.According to an idea that innovation is a process of involving a new combination of production factors that it never existed before. Meanwhile, it is an introduction of production systems in order to obtain excess profits. (Siegel, 2003) Schumpeter summarized innovative combination as following five methods: (1) introducing new products or improving quality of current products; (2) the adoption of new production methods or producing processes; (3) opening up a new market; (4) developing and using new raw materials or semi-finished products; (5) introduction of a new organizational management. Schumpeters innovative concept includes a wide range of technological innovation theory in later researches.2.2. Definition of technological innovationAmerican economist Mansfield (2005) believed that technological innovation is a first practical application of invention or technology. British science and technology strategist Freeman (1997) regarded that technological innovation means new products, processes, systems or services in the first commercial transformation. U.S. National Science Foundation noted that technological innovation is the latest and improved products, processes or services involving into the market. Therefore technological innovation will be positioned as follows: Technological innovation is an integrated process of scientific, organizational, commercial and financial activities for entrepreneurs to seize potential profit opportunities of the market in order to obtain commercial interests as their goals. (Shavinia, 2003) At the same time they may re-organize production conditions for the sake of establishing more efficient and less expensive production and management systems. Then it would be easy to launch new products and production methods as well as open up new markets. Taggart (1994) suggested that technological innovation refers to new ideas which are from a practical application of technology through R&D generate economic and social benefits of the commercialization.2.3. Capability of technological innovationSome studies considered that technological innovation capability is some conditions that companies could process innovative activities by adequately utilizing human resource, financial supports and other material resource in business enterprises conditions, which had formed an important part of technological innovate capability of enterprises. (Uliijn, 2007) Meanwhile, the same resources of human and finance cannot guarantee the results of entrepreneurial innovation in technology because all of resources in an enterprise can only be a potential form of innovative capability. When firms use these resources for the business services with achieving business goals, they are the real technological innovation.Terziovski (2007) believed that technological innovation capability of enterprises is a comprehensive range of features to facilitate business strategy of technology innovation for organizations. Moreover, it also includes allocation of available resources, understanding of the industrys development and technological development as well as the management of structural, cultural and strategic conditions. In addition, technological innovation is the core ability to master professional knowledge, technical systems and managing capacity of enterprise values. 2.4. Elements of technological innovationTechnological innovation capability of enterprises is a comprehensive system which is consisting of a number of elements to fulfil and complete technological innovation conditions. (Fritsch, 1999) From the view of organizational behaviour, it is an interaction of accessing to group organization, adaptability, innovation and technology. In addition, it can be regarded as available resources on the understanding of competitors, environment, and organizational structure changes as well as ground-breaking strategies. From organizational resources, capability of technological innovation can be decomposed into technological input (including research and development personnel, funds and patents) and business activities within social supports, which is for internal innovation of enterprises. (Dundar, 1997) As activities of enterprise technological innovation, the capability is a combination of senior technicians skills, technical systems, management skills and organizational values.According to specific types of technological innovation, it is an overall function of the systematic combination in product innovation and process innovation. From the process of technological innovation, it can be analyzed that the way to achieve technological innovation is divided into resource acquiring, innovative management, innovative orientation, R&D capabilities as well as products manufacturing and marketing capabilities. (Meckl, 2008) Owing to the difference in configuration and using condition as an evaluation criterion in different organisations, innovations of technology, products and production process as economic resources can be integrated in grasping opportunity of the market, technical design and development capabilities, manufacturing capacity, scale-up production, market information and feedback as well as product updates.2.5. Technological innovation in SMEsCorsi (2000) not only researched the relationship between technological innovation and market structure, but also studied the internal transaction costs on innovation. Therefore compared with large enterprises, innovation advantages of small business at least can be summarized as the following: (1) To the advantages of technological innovation for SMEs. He believes that large companies are more complex than small businesses in management structure. Under normal circumstances, large enterprises tend to be more conservative in decision-making compared with the small businesses. Bureaucracy in big business is not conducive to innovation and risk investment but leaders in small business are more conducive make innovative decisions for rapid changes in the market. (2) Relaxed regulatory environment enables innovation activities easy to carry out in SMEs because sometimes the administrative hierarchy in large enterprises often stifles innovation and passion of researchers. Meanwhile, the best incentives for researchers are often to being transferred to managers in large enterprises, but small businesses may deem innovation for staffs as their core competitive strategy that SMEs might often show a higher enthusiasm in innovative activities because large enterprises paid insufficient attention to small and less important innovations.However, from the frequency distribution in innovative activities, particular large enterprises and did not show a clear advantage. Therefore there is no relationship between the interval of application in innovation and the firm sizes and scales so that SMEs may invest less in carry out their own technological innovation with the knowledge of R & D inputs in universities and large companies. (Walsh and Niosi, 1995) In addition, innovation of enterprises tends to be declined with the increasing innovative concentration. In a not perfectly competitive market, the innovative advantages of large enterprises are obvious in the early industry growth that innovation and the use of skilled labour are relatively adequate in some important industries. However in an almost perfectly competitive market, small and medium enterprises could show their advantages of technological innovation in innovation strategies, which can offset inherent disadvantages in some extent and assist SMEs enhancing their innovative vitality.3. Research question and aimsThis proposed research is going to explore a systematic evaluation to scientifically, objectively and effectively evaluate the technical innovation capability of SMEs. As far as it mentioned above, through summing up both successful and failed experience of technological innovation enterprises could maintain and enhance their competitive advantage. Therefore this project is designed to give some ideas and feasible methods to strengthen the management of technical innovation within increasing investment for improvement of innovative mechanism while taking reasonable strategies of technological innovation with sustainable researching and developing capability of SMEs. Meanwhile, this proposed research will focus on investigating weaknesses and strengths in abilities of technological innovation within SMEs. According to a critical analysis, entrepreneurs may find out the insufficiency of their organizations and continuously improve their overall quality and efficiency as well as management mechanism, in order to survive and develop in a fiercely competitive environment.4. Proposed methodOn the basis of analyzing and summarizing the research results from international scholars, firstly the proposed research will define enterprises technological innovation ability in terms of course to analyze the composition key elements and characteristic of technological innovation ability and researches the innovative characteristic of SMEs. As can be seen from the above study, the innovative in small and medium enterprises does not mean that they are able to transform their innovative capabilities into improvement of profits. From the factors which affect the profitability of SMEs, R & D investment is not a prominent indicator in technological innovation. On the contrary, contributions made by technology managers and employees as well as product plans and marketing concerns are profitability and growth in competitiveness and marketing capabilities for SMEs. Steil (2002) had shown that the internal factors of technological innovation for SMEs are qualified scientists and engineers as well as the impact of their knowledge on employees. Another important facet is the outstanding leadership of a highly educated founds or entrepreneurs. In addition, the technological commercialization, marketing, product design, in-depth research of the market and corporate strategies in technical management are the ability of technological innovation for SMEs. SMEs in developing new products are no worse than large enterprises. (Walsh and Niosi, 1995) But they will face greater difficulties in the product commercialization process in the market access that the concerned standard should be higher than technical factors in innovative process. Based on these two points, the proposed research will try to establish an evaluation index system and evaluation criterion of the technological innovation capability of SMEs. After the index system set up, it will comparatively analyze the evaluation methods and models which are used at present. Then choose the fuzzy hierarchy comprehensive evaluation method, which is combined with the fuzzy comprehensive evaluation and the analytic hierarchy process, to evaluate the technological innovation ability of SMEs. The application of fuzzy hierarchy comprehensive evaluation method is to compulsory score is mandatory things change. It carved evaluative criterion into paragraphs and rigidly scores with a rigid yardstick to measure the objects being evaluated. (Asai, 1995) First, it should establish a hierarchy of the overall objectives in constituent elements of technological innovation capability of SMEs. Second, with the established index system, segments of marketing ability and innovative management capacity are qualitative indicators which are difficult to distinguish them as a separate element. Thus they are treated as common elements during the evaluation. For example, market research capabilities includes three sub-indicators: taking adequate market research when new products have been developed or significant improved, setting up a dedicated market research team and contacting long-term feedback from customers. So in hierarchy, the ability of utilizing market research is as a sub-layer element of the criteria.Finally, this research will give a factual ease to prove the scientific nature and feasibility of the evaluation system of the technological innovation ability of SMEs. In order to use this kind of method effectively, the operation steps and calculation model of method in detail will be explained by a showcase of Huaguang Electronics Co. Ltd in China according to build-up evaluating criteria of indexes. In terms of access, all the entrepreneurs and leaders voluntarily provided contact details when answering first questionnaire, so it may be difficult in persuading them to provide precise and real data in the follow-up interviews.5. Proposed working plan:April:the proposed research will focus on analyzing questionnaire data in the first step while continuing on secondary research. Meanwhile, potential interview participants will be indentified. Then invitation of potential interview will be the