Download Research on the Sustainable Development of Technological Innovation

Research on the Sustainable Development of Technological Innovation
in Small & Medium Enterprises
，
YUE Feifei1 2, MA Li1
1 School of Management, Jinan University, Jinan,Shandong Province,China, 250022
2 College of Economics&Management, Nanjing University of Aeronautics and
Astronautics,Nanjing,Jiangsu Province,China,210016
Abstract: This paper attempts to discuss issues pertinent to the sustainable development of
technological innovation in Small and Medium Enterprises (SME). The issue of how to accelerate
technological innovation and improve the sustainable development capabilities of SMEs has received
attention from the government, theorists, and enterprises. Centering on this theme, this paper firstly
defines the concept of SME and the sustainable development of technological innovation in SMEs.
Afterwards, this paper analyzes the reasons why technical innovation can foster sustainable
development of SMEs. At the end, this paper proposes measures to promote sustainable development of
technological innovation in SMEs.
Key words: Technological Innovation; Small & medium enterprises; sustainable development
Rapid advances in science and technology have played extremely important role in promoting the
implementation of sustainable development strategy. The scientific achievements of high technology
have been transformed continuously into productive forces, making technological innovation the biggest
and most powerful driver of global economy. In the environment of the global economy, the SMEs can
increase the competitive advantage to cope with the ever-increasing market competition by continual
technological innovation. The issue of how to accelerate technological innovation and improve the
sustainable development capabilities of SMEs has received wide attention from the government,
theorists, and enterprises.
1 The concept of technological innovation and sustainable development of small
& medium enterprises
1.1 Technological innovation
Since Austrian-born American economist Schumpeter coined the term “innovation”, many scholars
have researched on this area from different aspects. According to the National Institute of Standards and
Technology, technological innovation is the successful implementation (in commerce or management)
of a technical idea new to the institution creating it. In August 1999, the decision “to strengthen
technical innovation, develop high technology, and realize industrialization” was passed in the
Technological Innovation Conference in China. A more scientific definition of “technological
innovation” was also described in the conference. According to the conference, technological innovation
involves a serials’ of activities, such as applying new technology and new techniques; adopting new
methods of production and new management approach; improving quality of production; developing
new production; providing new service; capturing new market and realizing market value. As a result,
we can conclude that technological innovation of enterprises is the innovation in R& D, production, sale,
and management.
1.2 Sustainable development
In 1972, the concept of sustainable development was first proposed in the Conference on the Human
Environment in Stockholm. Later many scholars have researched the concept from perspectives of
natural, social, economic, and technological attributes. In 1987 the World Commission on Environment
and Development defined sustainable development as:" Meeting the needs of our generation without
compromising those of future generations to develop." There are two basic concepts in this definition:
First of all, human kinds, especially the poor, need development. Second, the development has to be
controlled and can not endanger future generations. In this context, the basic idea of sustainable
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development is the harmony between man and nature. It has to be compatible with social progress in
order to achieve the continuous ecological, social, and economic reunification
1.3 Technological innovation and sustainable development of small & medium enterprises
The idea of “sustainable development of enterprises” was proposed for the first time in the World
Environment Management Engineering in 1984. In this meeting all representatives reached consensus:
enterprises within each country are the root causes to global environmental deterioration. Every
enterprise must realize that pollution is either a kind of consumption or an inefficient production.
Environment protection is the objective requirement for the sustainable development of mankind. To
realize sustainable development, enterprises must abandon uncivilized production methods that
endanger the survival and development of themselves and environment. They should also establish good
corporate image and win recognition from the society through creative environmental management. In
doing so, they will also likely build competitive advantage over their competitors and survive in the
market competition.
Based on the analysis above, the term “sustainable development” contains two concepts: one is the
impact on the development of society through technological development. The other is the development
of enterprises themselves. Consequently, sustainable development of SME through technological
innovation implies the coordinated development and promotion of ecological benefits, social benefits,
and economical benefits simultaneously so as to realize unification of both quality and quantity
2 Technological innovations fostering sustainable development of SMEs
Technological innovation involves a series of activities such as conceptualizing new ideas, designing
products, prototyping, producing in volume, marketing, and commercializing, etc. It is also a process of
knowledge creation, conversion, and application. The essence of technological innovation is the
emergence of new technologies and its commercial application. Only through continuous product
innovation, SMEs can improve their competitive advantages and cope with market competition.
Promotion of sustainable development of SME through technological innovation can be reflected in the
following aspects:
2.1 The technological innovation of SMEs is to use information technology as a driving force to
stimulate industrialization, apply hi-tech to all types of industries, and improve technology level of
traditional industries. In order to lay out a solid foundation to enhance china’s industrial competitiveness
and achieve developments in leaps and bounds, we will need to accelerate transformation and
reorganization of old industrial enterprises, optimize organizational structure of small and medium
enterprise, enhance the vitality of traditional enterprises, and promote enterprise collaboration
2.2 In reality, competitions of SMEs often occur among enterprises with the same magnitudes. In
contrast, competitions among enterprises at different magnitudes are often complementary. Through
the technical innovation, the enterprises with higher magnitude shift the original industry to the outside,
and those enterprises with lower magnitude accept the industrial shift to realize the reorganization,
upgrade, and adjustment of industrial structures, realizing the future sustainable development of small &
medium enterprises.
2.3. Through technological innovation and technological transformation, SMEs can transform and
improve the technical level of their processing equipment, conserve resources, value environmental
protection, promote clean production, accelerate research and development of new materials and new
energy sources, so as to fundamentally transform the old growth mode of high energy consumption and
high pollution to ensure sustainable economic and social development
2.4 The technology innovation is a concrete expression of the idea that “Science and technology are
the primary productive forces". Through Implementation of the strategy of rejuvenating the country
through science and education vigorously, improving the quality of the people as a whole, and training
large numbers of outstanding entrepreneurs, scientists, management talents, and bringing into full play
China's advantages to enrich human resources, we can realize sustainable economic and social
development.
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3 Technical innovations as the driving force to promote the sustainable
development of the SMEs
Over the last few years, our SMEs have developed and contributed greatly to the development of our
economy. However, for various reasons, there are still a great deal of problems associated with our small
& medium enterprises, including shortage of technical talents, lack of fund, lower technology level,
inexperienced management, and suboptimal organizational structure. These problems have inhibited the
development of SMEs and will likely be harmful to their future development, if not addressed on a
timely basis. Consequently, it is very important to improve technical content of production and
competitive capabilities of small & medium enterprises. It is also critical for SMEs to choose
appropriate technical developmental pattern to make sustainable technical innovation.
3.1 Development strategy supported by full-time technical personnel
Existing staffing strategy in SMEs relies on part-time senior technical experts as the backbone of
R&D, supported by junior or middle-level technical staff. Because of limitations of SMEs, the situation
will not change any time soon. Consequently, SMEs should start to develop their own senior technical
expert for long-term development. The human resource strategy should be integrated with technology
development, corporate development, and economical benefits to realize sustainable growth
3.2 Enhancement of the technical relevancy of product innovation
The technological innovation in SMEs often target at key processes and products and is very narrow
focused. Even though significant time, material and financial resources have been invested, the
technological innovation is often not relevant to the future production development. Namely, one
technical innovation can only be used once, causing enormous waste of resources. Therefore, SMEs
should take into account the technical relevancy of product development.
3.3 Appropriate use of research and development fund
Due to small size of investment and low profit, it is unrealistic for SMEs to increase research and
development investment significantly in a short time frame. Therefore, while continuing to carry on new
product development without reducing research and development investment, SMEs should implement
the strategy emphasizing sustainable use of research and development funds. This implies that SMEs
should use R&D funds in an efficient and reasonable way based on their own characteristics
3.4 Improvement of the present financing methods in SMEs
Financing has always been one of the major problems limiting the development of domestic SMEs.
Compared with big enterprises, domestic SMEs do not have long-term, stable and sufficient financing
sources. Furthermore, financing requirements of SMEs focusing on technological innovation have
special characteristics, such as significant capital demand, high risk, and high reward. In view of
financing requirements, SMEs should improve existing financing methods: First of all, venture capital is
an ideal choice for small & medium enterprises. Second, SMEs should establish a good credit and trust
system. Last, SMEs should refine investment guarantee, publish bundled bond and set up
venture-compensated fund.
3.5 Policy support for SMEs to promote sustainable growth
Because of lack of access to funds and information and a variety of other issues, SMEs in many
countries are facing huge challenges. As demonstrated by research, government's policies and the
behavior have tremendous influence on SMEs. As a result, governments should take all kinds of
measures to stimulate, guide and support SMEs in the process of technological innovation. First of all,
governments should establish favorable policies to stimulate sustainable development of SMEs. Second,
governments should adjust policies to lead SMEs in the right direction of technological development.
On one hand, enterprise policies should take into account the characteristics of technology development.
On the other hand, they should also factor in the economy of scale and restrict the establishment of
high-pollution small enterprises. Thirdly, governments should improve financing environment and
expand financing channels. SME-oriented loans and venture capital mechanisms should be set up to
promote sustainable development
3.6 Expansion of opening to the outside world and international cooperation
The sustainable development of technological innovation in SMEs has become a major cause of
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universal concern to the international community. SMEs should seize this opportunity and, through
extensive publicity, expand our channels of cooperation with the international community, seek
international aid, attract foreign investment, and advance science and technology for sustainable
development.
4 Conclusions
The sustainable development of technological innovation in SMEs is a systemic engineering, which
involves a number of issues such as technical level, capabilities of key research and develop personnel,
availability of fund for R&D and business development, so on and so forth. These questions cannot be
resolved in a short time. SMEs need to develop and implement strategy based on their own
characteristics and strive to realize sustainable growth in the long run.
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The author can be contacted from e-mail: [email protected]
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