Small firms in high tech - A European analysis

The purpose of this paper is to provide insights into the diffusion process of a new technology referred to as microsystem technology. Specific aspects of the diffusion process, i.e. the use of microsystem technology at a certain point of diffusion, will be analyzed by means of a sample of firms covering more than one thousand European companies. The sample is subdivided into size-classes and industrial sectors, in order to obtain answers to the central issues covered by this paper. Wherever possible the results of the survey are complemented by more detailed information provided by interviews held in companies. The first question is related to one of the main hypothesis in innovation theory, i.e. that new technologies spread from large to small firms. In this context, the analysis will focus on whether, at an early stage of the diffusion of microsystem technology, it is possible to ascertain differences between large and small firms. The second question concerns a relatively new finding with regard to the role of small firms in the process of technological change: is R&D collaboration in the adoption of new technologies, i.e. microsystem technology, more relevant for small firms than for large firms? The empirical findings support the traditional view that diffusion of new technologies is related to size-classes. However, with the help of external partners, small firms do have opportunities to master complex and high-risk technologies. Furthermore, specific production and application requirements reveal a more complex picture of the diffusion between size-classes and industrial sectors.