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4.2.3.4 Clustering and access to technology and innovation
A low level of innovation, know-how and modern technology represents a major obstacle for the entry
into competitive international markets by SMEs. In some countries, information on technologies and
R&D partners is provided by TPOs to current and potential exporters. More direct actions to sustain
R&D or technology adoption are implemented in some cases. Grants and tax incentives are common
tool used to support purchase of equipment and new technologies.
In a few cases, particularly in the Asian countries analysed, a more comprehensive approach is
implemented, to foster innovation-oriented linkages, through clustering or technology and business
incubators. This generally requires well-established institutions, including on the private sector side, as
well as a critical mass of SMEs and other support entities. New firms and SMEs do not innovate alone
but rather in collaboration with others, including with their suppliers and customers, and with
universities and research organisations. Collaboration is an important element in the strategies of
innovative SMEs to overcome some of the barriers they face, including limited funding and the lack of
management resources, technological competences, and adequate time horizons to invest in a long-
term strategy (OECD, 2010).
Local business linkages and networks are therefore critical to new and small firm innovation.
Worldwide, successful examples of SME clusters have proved the importance of local linkages and a
conducive local business environment for SME competitiveness in global trade. The international
experience shows that SMEs can be importantly motivated by factors within their external
environment, including peer networks, supply chain links and social ties, which are typically
developed at the local level. In this regard, SME clusters and export consortia may represent important
enablers for small businesses, facilitating their linkage with regional and global value chains.
Importantly, clusters can ease SME access to information and knowledge about foreign market
opportunities and exporting strategies, and facilitate collaborative technology development.
In a few of the countries surveyed, a clustering approach has been used to foster SME competitiveness
and internationalisation. This is the case of Malaysia’s Multimedia Super Corridor (MSC), a Special
Economic Zone launched in 1996, with the purpose to develop a hub for innovative producers and
users of multimedia technologies. In Indonesia, the government has promoted the development of
Business Development Services (BDS) that address needs of SMEs in selected clusters. Under this
programme, each BDS provider enters into a three-year contractual partnership with the government,
to serve one or more clusters. In exchange, the government provides start-up capital, which the
provider will pay back by servicing the cluster firms.