To Support R&D or Linkages? Seeking a better policy mix for SME support

Author Name SUZUKI Jun (GRIPS)
Creation Date/NO. July 2017 17-E-098
Research Project Study on Industrial Innovation Capability and Innovation Infrastructure
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The innovation policy mix is reported to be increasingly targeted and demand side-oriented in recent years. In this context, an important question for policy makers, scholars, and analysts in Japan as well as in other nations is how to provide policy support to small- and medium-sized enterprises (SMEs). In this study, the effects of the new generation of policy mix supporting SMEs by the Ministry of Economy, Trade and Industry (METI) in Japan, the Sapo-In program, has been analyzed using patent data from the viewpoint of the effectiveness of financial support to firms (research and development (R&D) subsidy) and the support to build linkages (soft support) on both the supply- and demand-side (matching, brokering, and consulting). The results suggest that soft support has wider impacts in terms of patenting and internal and external network formation while financial support has very limited effects. Based on these results combined with information from the report on the follow-up monitoring survey of Sapo-In projects conducted by METI, the possibility of a better policy mix is discussed.