Knowledge implications for the NITEC Program: a preliminary analysis of an innovation program directed at building innovation capabilities in SMEs

Abstract

Economists and others scientists have demonstrated that R&D activities generate widespread benefits enjoyed by consumers and society at large. As a result, the overall economic value of R&D to society often exceeds the economic benefits enjoyed by the innovators as a result of their efforts. Economists describe this phenomena as a positive externality or spillover (Jaffe, 1996) (European Commission, 2005) (Cohen & Levinthal, 2000) (Richard Gray and Stavroula Malla, 2007). Similarly, one can say that the intended results of specific innovation programs directed at SME are usually complemented by results that were not specifically aimed at. The first type of results, which are the specified objectives of the program, are called direct impacts, and the second type of results are called the indirect impacts of the innovation program. This paper identifies and analyses the indirect impacts of an innovation program, implemented and financed by the Portuguese state under the aegis of the 6th Portuguese Framework Program, and directed at SMEs. The program, called NITEC, aimed to foster and support the creation of R&D structures inside SMEs, by providing financial support to hire research personnel and acquire research equipment. This program was conceived to address a key problem in the National Innovation System (NIS) in Portugal: the low level of in-house technology and innovation capabilities in Portuguese firms. This specific program was selected because of its features: 1) the funds are governmental; 2) promotes activities related to R&D; 3) the people involved are expert in the working and research area; 4) the project-base has a limited period of time (maximum five years); 5) each company has its own project. These features are essential to identify knowledge acquisition in the firms which participated in the program, as a main topic being evaluated in the results.