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Innovation grant (S)hopping: Unpacking SMEs' support choices between multiple potential funding sources

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  • Luan, Siqiao
  • Hewitt-Dundas, Nola
  • Roper, Stephen

Abstract

In many national contexts, firms encounter a complex support landscape for research and development (R&D) and innovation, which includes national and local grant schemes. How do small and medium enterprises (SMEs) navigate these landscapes? What factors influence their decision-making processes and choices regarding funding applications? Understanding these processes is crucial for creating more effective and precisely targeted innovation support systems. Using frameworks for contingent and hedonic decision-making, we conceptualise how SMEs choose between different innovation funding options. Interview data indicate a strong experiential element in SMEs' decision-making. Decisions between alternative funding sources tend to be reactive and driven by intuition in emerging SMEs, more planned and hedonic in early-trading SMEs, and based on strategic and hedonic reasoning in mature, revenue-generating SMEs. The findings provide valuable insights into the dynamics of SMEs' innovation funding strategies and offer practical implications for designing funding programmes that meet the needs of SMEs at various stages of development.

Suggested Citation

  • Luan, Siqiao & Hewitt-Dundas, Nola & Roper, Stephen, 2026. "Innovation grant (S)hopping: Unpacking SMEs' support choices between multiple potential funding sources," Research Policy, Elsevier, vol. 55(1).
    • Handle: RePEc:eee:respol:v:55:y:2026:i:1:s0048733325001933
    DOI: 10.1016/j.respol.2025.105364
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