The role that small firms and entrepreneurship play in economic development has been particularly contentious. Joseph Schumpeter (1911), in his early work, argued that through a process of "creative destruction," small and new firms would serve as agents of change and a catalyst for innovation and growth. But, he later rescinded this view, instead concluding that large corporations were the engines of growth. Just as it seemed that a consensus had emerged among scholars and policy makers that small business was at best superfluous and at worst a drag on growth and economic development, David Birch provided evidence that, in fact, small firms were the engines of job creation. The early skepticism of challenge to Birch's findings revolved around methodology and measurement. However, a wave of subsequent studies by different authors, spanning different time periods, sectors, and even countries, generally confirmed Birch's original findings-for most developed countries and in most time periods, small business has provided most of the job creation.

The ability to manage knowledge is relevant for millions of small and medium sized enterprises (SMEs) that operate in high-tech environments. They strongly depend on external knowledge about customers, technologies, and competitors because, as opposed to large companies, they have limited internal knowledge resources and little power to control their business environments. Present KM literature, however, mainly focuses on large companies and therefore does not explain, how SMEs, for example, can successfully apply groupware, data mining, semantic networks, and knowledge maps. This book addresses this problem by introducing the concept of knowledge integration (KI) that places emphasis on the identification, acquisition and use of external knowledge. Drawing from this theoretical basis, the book presents concepts and instruments specifically designed for SMEs, as well as examples of their implementation and use in practice.

The book investigates the meaning, nature and consequences of innovation interactions between small and medium-sized manufacturing enterprises (SMEs) and knowledge-intensive business services (KIBS). It focuses on the concept of a virtuous circle linking KIBS' and SMEs' innovation capacities in Germany and France. A particular emphasis is given to the question of the role and nature of the knowledge base of the firm in an evolutionary perspective. The integration of the spatial dimension strengthens the examination. For this purpose, a new data analysis methodology has been developed. This methodology consists of a combination of complementary statistical procedures, which provides a tool allowing a reliable examination of the data collected. The samples considered in the analysis constitute a source of rich, complex, and diversified information.

Globalization has jarred the traditional role and competitiveness of small- and medium-sized enterprises. This masterful volume comprises leading scholars, policy makers and business leaders who have new insights and strategies for SMEs creating opportunities rather than being victims of globalization. The result is a breakthrough in our understanding of entrepreneurship in the global context. David B. Audretsch, Indiana University, Bloomington, US and WHU, Germany Small and medium-sized enterprises (SMEs) often have difficulty competing in the global economy unless they collaborate with domestic or foreign partners or with public sector organizations. This book addresses the resource leverage and innovation challenges that increased global trade represents for SMEs. In doing so, it explores how SMEs can become more competitive at home and in foreign markets as stand-alone firms or as members of supplier and customer networks. SMEs are turning increasingly to innovation as a source of competitive advantage in order to protect their home markets and participate in expanding foreign markets. The contributors to this volume leading experts in entrepreneurship, innovation, and international business provide in-depth coverage of the most compelling issues facing SMEs. These include: innovation as a competitive strategy, network dynamics, ways to leverage technology, internationalization, and the role of the public sector in helping SMEs to overcome resource deficiencies. This comprehensive look at SMEs in the global marketplace will be of great interest to academics who study entrepreneurship, innovation, or international business, officials from public sector agencies with responsibility for helping SMEs to internationalize and become more innovative, and senior executives of SMEs or executives of larger companies who are considering collaboration with SMEs.