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

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?

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):

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.

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.