Technical Entrepreneurship and Technological Innovations: SMEs in the Electronics Industry in Bangalore, India

This paper probes the nature of innovative SMEs of technical graduates and post-graduates as compared to those of technical diploma holders and non-technical entrepreneurs in the electronics and telecommunication industry of Bangalore. Further, it ascertains innovation performance of the three groups in terms of shares of innovated products in total sales. Subsequently, it examines economic performance of technical entrepreneurs (graduates/postgraduates) relative to those of non-technical entrepreneurs and technical diploma holders. The former had higher shares of technically qualified employees, more experienced employees and more exclusive design offices, higher shares of innovated products in total sales and at the aggregate, had higher partial factor productivities and returns to scale. However, differences in partial factor productivities are not statistically significant and the difference in returns to scale could not be exclusively attributed to innovations since innovations are of incremental in nature in both the groups. The absence of qualitatively superior innovations despite higher "innovative capability" of the technical entrepreneurs is largely attributed to the lack of competition in the product market.