An Investigation of the Determinants of SMEs’ Innovation in Hanoi

DOI

10.2991/aebmr.k.211119.029How to use a DOI?

Keywords

innovation; SMEs; Hanoi; Vietnam; technological capabilities; culture; strategy; management skills; policy; collaboration; financial support

Abstract

Innovation is considered an important premise to create competitiveness and to achieve long-term growth of the company in the ever-changing business environment. Enterprises are constantly improving their innovation and creativity to survive and develop. The issue of innovation is increasingly attracting the attention of researchers, business administrators and policy makers. Small and medium-sized enterprises (SMEs) are essential elements of the economy, and businesses have a responsibility to foster innovation and competition in many economies. To be competitive in such economies, SMEs must successfully support strategic management decisions. The problem can lie at the decision stage depending on the market conditions with many external and internal factors. Perspectives on creating a driving force to promote innovation and to develop the private sector quickly and sustainably, together help build and strengthen a socialist-oriented market economy. Constantly promoting business support, especially SMEs, is one of the key tasks of Hanoi city. This study proposes to investigate how the use of internal and external factors influences the innovation process of SMEs. Therefore, the aim of the study is to comprehensively present the factors affecting innovation. The research is conducted based on the use of theoretical background of enterprise innovation activities with 07 main factors including: (1) Technological capabilities; (2) Innovation culture; (3) Innovation strategy; (4) Management skills; (5) Innovation policy; (6) Collaboration with businesses on innovation; and (7) Access to financial support. On that basis, the author conducts a survey and analysis by quantitative method at SMEs in Hanoi about the current status of innovation activities to provide a practical view of the determinants of innovation for SMEs in Hanoi. The proposed analytical framework with specific groups of factors is suggested for businesses, researchers and state management agencies on enterprises to have further practical studies on this topic as well as consult and make appropriate policies.

Research purpose:

This paper initially investigates both internal and external factors influencing the term “innovation” among SMEs in Hanoi. The research for factors that related to innovation in SMEs in the era of globalization is appropriate in this context as they play an important role in the sustainability development and survival of SMEs in developing countries in general and specifically SMEs in Hanoi city, Vietnam.

Research motivation:

Research on factors affecting innovation in SMEs in Vietnam in general and Hanoi in particular is still rare. Especially in the current period of integration into the market economy and technology 4.0, it is imperative that SMEs, which account for more than 95% of business types in Vietnam, need to innovate to increase their competitive advantage. In addition, this paper also presents the situation of the Government’s support for innovation in SMEs to help strategic planners have an overview and develop innovation plans for these businesses in the future.

Research design, approach and method:

This research is conducted based on the use of theoretical foundations on innovation activities of enterprises with 07 main factors. The author conducts a survey and analysis using quantitative method at SMEs in Hanoi with respect to the current state of innovation activities in order to give a realistic view of the decisive factors to SMEs’ innovation activities. The proposed analytical framework with specific groups of factors is suggested for businesses, researchers and state management agencies on enterprises to have more in-depth practical studies on the subject and make appropriate policies. This study was conducted based on the primary data and secondary data of SMEs in Hanoi in the period of 2019-2021.

Main findings:

To assess determinants of SMEs’ innovation in Hanoi, the enterprise sector empirical study is conducted at the local level with 250 companies. The results lead to the emergence major findings. It can be inferred that the dependent variable is significantly impacted by Technological capabilities, Management skills, Innovation culture, Innovation policy, Innovation strategy, and Access to financial support.

Practical/managerial implications:

From the analysis of determinants to innovation activities at SMEs, this article apresents the state’s current state of supporting innovation for SMEs and makes suggestions on mechanisms and general preferential policies for policy makers in order to offer preferential and supportive policies to create the most favorable research and development, business investment environment for SMEs in Hanoi.

Copyright

© 2021 The Authors. Published by Atlantis Press International B.V.

Open Access

This is an open access article under the CC BY-NC license.

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TY  - CONF
AU  - Dinh Phuong HOA
AU  - Tran Thi Thu HAI
PY  - 2021
DA  - 2021/12/07
TI  - An Investigation of the Determinants of SMEs’ Innovation in Hanoi
BT  - Proceedings of the International Conference on Emerging Challenges: Business Transformation and Circular Economy (ICECH 2021)
PB  - Atlantis Press
SP  - 296
EP  - 311
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.211119.029
DO  - 10.2991/aebmr.k.211119.029
ID  - HOA2021
ER  -