Young SMEs: Driving innovation in Europe?

Reinhilde Veugelers, Annalisa Ferrando, Senad Lekpek and Christoph Weiss

No 2018/07, EIB Working Papers from European Investment Bank (EIB)

Abstract: Using large scale EIB Investment Survey evidence for 2016 covering 8,900 non-financial firms from all size and age classes across all sectors and all EU Member States, we identify different innovation profiles based on a firm's R&D investment and/or innovation activities. We find that "basic" firms - i.e. firms that do not engage in any type of R&D or innovation - are more common among young SMEs, while innovators - i.e. firms that do R&D and introduce new products, processes or services- are more often old and large firms. This hold particularly for "leading innovators", ie those introducing innovations new to the market. To further explore why young SMEs are not more active in innovation, we explore their access to finance. We confirm that young small leading innovators are the most likely to be credit constrained. Grants seem to at least partly addressing the external financing access problem for leading innovators, but not for young SMEs.

Keywords: young small companies; innovation; access to finance (search for similar items in EconPapers)
JEL-codes: G24 O31 O38 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-cfn, nep-ent, nep-eur, nep-fdg, nep-ino, nep-sbm and nep-tid
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:eibwps:201807

DOI: 10.2867/784466

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