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The influence of absorptive capacity on collaborations between universities and SMEs in Germany

Project summary:

Innovation is a key factor for the performance of corporations in Germany and for the German economic development as a whole. Knowledge and technology transfer through collaborations between universities and industry support companies in their efforts to increase their innovation-based performance (Becker and Dietz 2004, Arvanitis et al. 2012). Usually, large companies collaborate more often with universities than small and medium sized enterprises (SMEs) (Davey et al. 2018). However, especially SMEs characterize the German corporate landscape (SME accounted for 99.3% of all companies and 61.2% of all employees in 2016, Federal Statistical Office 2018) and are often referred to as the backbone of the German economy.

The research project intends to examine this discrepancy. We aim to investigate the transfer competence of SMEs in Germany taking into account different university transfer channels. By identifying critical success factors, we generate insights on ways of improving and reinforcing collaboration activities between universities and SMEs. Building upon the existing theory of absorptive capacity (ACAP), developed by Cohen and Levinthal (1990). We hypothesize that high absorptive capacity affects and determines the degree of success of a transfer activity and subsequently the arising benefits for a company. More specifically, we aim to analyze the impact that absorptive capacity has in the particular case of university-industry interaction with a focus on SMEs. Therefore, we will investigate the transfer competence of SMEs in Germany taking into account different university transfer channels.

Our research questions are:

  • Does absorptive capacity affect the selection of the university-industry transfer channel?
  • Does a university's program of established transfer channels affect the ability to find external knowledge, assimilate it and apply it?

Contact information:

Claudia Wingerter
Doctoral researcher
Phone: +49 (0) 621 5203 262
Email: claudia.wingerter@hwg-lu.de

The project is part of the InnoProm funding program, which is supported by the European Regional Development Fund and the state of Rhineland-Palatinate. Duration: 03.2018 - 02.2021

What influences the transfer competence of SMEs?

To analyze the transfer competence of an SME, we apply the theoretical construct of "absorptive capacity" by Cohen and Levinthal (1990). The authors examine how to find, assimilate and apply external knowledge as a critical factor for the innovation process within a company. The concept of absorptive capacity comprises not only of the sum of the learning and problem-solving abilities and capacities of all individuals belonging to an organization. Adequate communication structures are also required within the company as well as to outside stakeholders in order to be able to make use of these gathered abilities. "Prior related knowledge" of its employees plays an important role as an antecedent to confer this ability for the existing magnitude of absorptive capacity in an organization. Based thereon, the authors conclude that conducting own research and development contributes to developing this ability. Zahra and George (2002) advance in a reconceptualization and extension of the original theoretical construct and define absorptive capacity as a set of organizational routines and processes in a company. They categorize the capability into four dimensions: acquisition, assimilation, transformation and exploitation:


Examining how to measure absorptive capacity of SMEs is the first step in order to approach the research questions. Although some studies have addressed absorptive capacity in recent years, there is no consistent operationalization so far. The theoretical construct gives some reference points, such as the importance of prior related knowledge or communication structures. The problem to measure absorptive capacity directly leads to non-validated measured variables and prevents comparability of the different studies. The literature review conducted by Zahra and George (2002) raises doubts on whether the researchers use the same attributes of the construct. Some try to measure absorptive capacity through innovation and collaboration activities of companies such as R&D budget, R&D intensity or the amount of joint research projects (Schmidt 2005, Fabrizio 2009). Others use the organizational structures such as knowledge management, incentive systems or human resources as an indicator of absorptive capacity (Flatten et al. 2011b, Ströh 2014, Valentim et al. 2016). The scale by Flatten et al. (2011a) is the most comprehensive and the validated measure of ACAP, which is listed in the following table. The authors have developed a multidimensional measure based on a series of qualitative pre-tests and two large survey-based studies of German companies, but not particular for SMEs. However, a low number of employees, often small or even absent R&D departments and no permanent ongoing R&D activities are typical for SMEs. Hence, the question arises: are the previously used variables suitable for SMEs and if not, which would be an alternative?

ACAP scale by Flatten et al. (2011a):

Please specify to what extent your company uses external resources to obtain information (e.g., personal networks, consultants, seminars, internet, database, professional journals, academic publications, market research, regulations, and laws concerning environment/technique/health/security):

  • The search for relevant information concerning our industry is every-day business in our company.
  • Our management motivates the employees to use information sources within our industry.
  • Our management expects that the employees deal with information beyond our industry.

Please rate to what extent the following statements fit the communication structure in your company:

  • In our company ideas and concepts are communicated cross-departmentally.
  • Our management emphasizes cross-departmental support to solve problems.
  • In our company there is a quick information flow, e.g., if a business unit obtains important information it communicates this information promptly to all other business units or departments.
  • Our management demands periodical cross-departmental meetings to interchange new developments, problems, and achievements.

Please specify to what extent the following statements fit the knowledge processing in your company:

  • Our employees have the ability to structure and to use collected knowledge.
  • Our employees are used to absorb new knowledge as well as to prepare it for further purposes and to make it available.
  • Our employees successfully link existing knowledge with new insights.
  • Our employees are able to apply new knowledge in their practical work.

Please specify to what extent the following statements fit the commercial exploitation of new knowledge in your company (NB: Please think about all company divisions such as R&D, production, marketing, and accounting):

  • Our management supports the development of prototypes.
  • Our company regularly reconsiders technologies and adapts them accordant to new knowledge.
  • Our company has the ability to work more effectively by adopting new technologies.

Due to the inconsistent operationalization, we have applied an inductive approach to answering the following questions:

  • Does the common operationalization of ACAP also hold for SMEs?
  • If not, which measured variables can be applied alternatively?
  • Are there any additional SME-specific factors?

In the first quarter of 2019, a qualitative empirical study was conducted to identify and analyze possible ways of measuring the absorptive capacity of SMEs. Based on the ACAP scale by Flatten et al. (2011a) partly standardized interviews with a mixed sample of n=10 German SMEs from different sectors and interviewees from different management levels were performed. Applying Mayring's (2015) qualitative content analysis, the results show that the current operationalization of ACAP can also be applied to SMEs. However, we observe influencing factors that possibly affect a company's ACAP process: organizational culture, personality traits of the management, intergenerational conflicts, process and responsibility of decision-making, distinct hierarchical structures and sense of responsibility of the employees. The impact of these factors will be the focus of further investigations.

The further proceeding is to determine the current state of research regarding the observed influencing factors. We will develop the hypotheses in preparation for a quantitative study of SMEs in late 2019.

List of references:

Arvanitis, Spyridon; Ley, Marius Christian; Wörter, Martin (2012): Knowledge and Technology Transfer between Universities and Private Enterprises in Switzerland 2011. An Analysis based on Firm and Institute Data. ETH Zurich. KOF Swiss Economic Institute. Zurich.

Becker, Wolfgang; Dietz, Jürgen (2004): R&D cooperation and innovation activities of firms-evidence for the German manufacturing industry. In: Research Policy 33 (2), p. 209-223.

Cohen, Wesley M.; Levinthal, Daniel A. (1990): Absorptive Capacity: A New Perspective on Learning and Innovation. In: Administrative Science Quartely 35, p. 128-152.

Davey, Todd; Galan Muros, Victoria; Meerman, Arno; Orazbayeva, Balzhan; Baaken, Thomas (2018): The state of university-business cooperation in Europe. Final report. Luxembourg.

Fabrizio, Kira R. (2009): Absorptive capacity and the search for innovation. In: Research Policy 38 (2), p. 255-267.

Federal Statistical Office (2018): Shares of small and medium-sized enterprises by selected characteristics 2016, Online: www.destatis.de/DE/ZahlenFakten/GesamtwirtschaftUmwelt/UnternehmenHandwerk/KleineMittlereUnternehmenMittelstand/Tabellen/Insgesamt.html [19.12.2018].

Flatten, Tessa C.; Engelen, Andreas; Zahra, Shaker A.; Brettel, Malte (2011a): A measure of absorptive capacity: scale development and validation. In: European Management Journal 29 (2), p. 98-116.

Flatten, Tessa C.; Greve, Greta I.; Brettel, Malte (2011b): Absorptive Capacity and Firm Performance in SMEs. The Mediating Influence of Strategic Alliances. In: European Management Review 8 (3), p. 137-152.

Mayring, Philipp (2015): Qualitative content analysis: principles and techniques. 12ed edition, Weinheim

Schmidt, Tobias (2005): Absorptive Capacity - One Size Fits All? A Firm-Level Analysis of Absorptive Capacity for Different Kinds of Knowledge. ZEW Discussion Paper, No. 05-72. Centre for European Economic Research GmbH. Mannheim.

Ströh, Dorothee (2014): Absorptive capacity of SMEs. An empirical analysis of the early phases in the process of external information absorption of German SMEs in the mechanical engineering industry. Hamburg.

Valentim, Luís; Lisboa, João Veríssimo; Franco, Mário (2016): Knowledge management practices and absorptive capacity in small and medium-sized enterprises: is there really a linkage? In: R&D Manage 46 (4), p. 711-725.

Zahra, Shaker A.; George, Gerard (2002): Absorptive Capacity. A Review, Reconceptualization, and Extension. In: Academy of Management Review 27 (2), p. 185-203.

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