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Importance of Technological Innovation for SME Growth - Evidence from India


  • Bala Subrahmanya, M. H.

    () (Indian Institute of Science)

  • Mathirajan, M.

    (Anna University)

  • Krishnaswamy, K. N.

    (Indian Institute of Science)


This paper probes the drivers, dimensions, achievements, and outcomes of technological innovations carried out by SMEs in the auto components, electronics, and machine tool sectors of Bangalore in India. Further, it ascertains the growth rates of innovative SMEs vis-a-vis noninnovative SMEs in terms of sales turnover, employment, and investment. Thereafter, it probes the relationship between innovation and growth of SMEs by (i) estimating a correlation between innovation sales and sales growth, (ii) calculating innovation sales for high, medium, and low growth innovative SMEs and doing a one-way ANOVA, and (iii) ascertaining the influence of innovation sales, along with investment growth and employment growth on gross value-added growth by means of multiple regression analysis. The paper brings out substantial evidence to argue that innovations of SMEs contributed to their growth.

Suggested Citation

  • Bala Subrahmanya, M. H. & Mathirajan, M. & Krishnaswamy, K. N., 2010. "Importance of Technological Innovation for SME Growth - Evidence from India," MERIT Working Papers 2010-007, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  • Handle: RePEc:unm:unumer:2010007

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    References listed on IDEAS

    1. Coad, Alex & Rao, Rekha, 2008. "Innovation and firm growth in high-tech sectors: A quantile regression approach," Research Policy, Elsevier, vol. 37(4), pages 633-648, May.
    2. Rick Delbridge & Tim Edwards & Max Munday, 2001. "Linking Innovative Potential to SME Performance: An Assessment of Enterprises in Industrial South Wales," ERSA conference papers ersa01p135, European Regional Science Association.
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    Cited by:

    1. Gabriele Santoro & Alberto Ferraris & Elisa Giacosa & Guido Giovando, 2018. "How SMEs Engage in Open Innovation: a Survey," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 9(2), pages 561-574, June.
    2. Dr. Arif Anjum, 2018. "Impact of Technology Adoption on the Performance of Small and Medium Enterprises in India," The Journal of Social Sciences Research, Academic Research Publishing Group, pages 857-867:5.
    3. Mohamed Ramadan A. Rezk & Haiam Helmy Ibrahim & Amr Radwan & Mahmoud M. Sakr & Manuela Tvaronavičienė & Manuela Tvaronavičienė & Leonardo Piccinetti, 2016. "Innovation magnitude of manufacturing industry in Egypt with particular focus on SMEs," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 3(4), pages 307-318, June.
    4. Erind Hoti & Gentian Hoxhalli, 2015. "From demand-pull and technology-push innovations, towards knowledge-based innovation systems. Evidence from Albanian small and medium enterprises," Proceedings of International Academic Conferences 2805365, International Institute of Social and Economic Sciences.
    5. Raza Ur Rahman & Syed Mohsin Ali Shah & Hatem El-Gohary & Muzaffar Abbas & Syed Haider Khalil & Saad Al Altheeb & Fahad Sultan, 2020. "Social Media Adoption and Financial Sustainability: Learned Lessons from Developing Countries," Sustainability, MDPI, Open Access Journal, vol. 12(24), pages 1-26, December.

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    More about this item


    technological innovations; sales growth; auto components; electronics; machine tools; Bangalore;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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