R&D Collaboration by 'stand-alone' SMEs: opportunities and limitations in the ICT sector

This paper focuses on SMEs for whom ICTs are a central, core technology. I argue that globalisation has profoundly affected the way in which SMEs organise their R&D activities. On the one hand, SMEs have always sought to specialise in niches, given their limited resources. As such, their role as specialised suppliers to large firms has increased. On the other hand, the cross-fertilisation of technologies has meant that they also need to span several competences. This state of affairs has altered the raison d''être of the SME. The state of affairs vis-à-vis SMEs are discussed by examining two important concurrent dynamics. The first dynamic pertains to the various types of SMEs and how the industrial structure and external environment influences their collaborative activity. The second dynamic is associated with the evolution of technologies, technological paradigms and trajectories. I explain how different types of SMEs tend to predominate the industry structure at a given stage of the evolution of a given core technology. Evidence is presented from a survey on the collaborative activities of one particular form of the SME - the ''stand-alone'' SME - in the ICT sector. The analysis is based on in-depth interviews and questionnaire surveys of over a 100 European technology firms and attempts to explain the reasons for the preference of one type of collaboration over another, and the limitations of collaboration as an alternative to in-house R&D.