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Financing Patterns of R&D in Small and Medium-Sized Enterprises and the Perception of Innovation Barriers in Germany

Referierte Aufsätze Web of Science

Heike Belitz, Anna Lejpras

In: Science & Public Policy 43 (2016), 2, S. 245-261


We analyze the role public support plays in small and medium-sized enterprises (SMEs) R&D financing as well as these firms’ assessments of financing conditions in the context of other framework conditions for innovation. Using the sample of 2,708 German SMEs that participated in public R&D promotion programs during 2005–10, we identify four unique types of R&D financing. Firms are generally positive about public financing of R&D in Germany, although a group of R&D companies without a track record that wish to introduce an innovation to the market find it difficult to procure a loan. SMEs perceive obstacles to innovation primarily in the non-financial sphere, namely, the supply of skilled personnel, market regulation, and competition conditions. Therefore, future work on innovation policies for SMEs should place greater emphasis on the non-financial external framework conditions for firm R&D and innovative activity.

Keywords: barriers to innovation, financing of R&D, R&D promotion, small and medium-sized enterprises