An in-depth analysis of survey findings is carried out based on the interview findings. First, technology exploration benefits were found to have the most significant impact on the level of satisfaction, followed by production costs and management costs. Thus, these are three key factors associated with the level of satisfaction for international R&D collaboration among SMEs.
First, the interviewees indicated various types of technology exploration benefits including reduced time and costs for R&D, increased possibility of technology development success, and increased quality of technology compared to internal R&D. In addition to these obvious outputs of collaborative R&D projects, SMEs seem to have obtained another type of indirect outcome, which supports the argument that R&D collaboration tends to reduce the production costs not only for the current project but also for later ones. Some of the interviewees (5 out of 14) mentioned that the collaboration had led to other possibilities for collaboration. After the collaboration projects had been successfully completed, SMEs in a collaboration network often became good business partners and tended to keep in touch to share market information or to help test their business ideas in the foreign markets where the partners are located; thus understanding global market trends and conducting a market test on foreign customers became easier than before the collaboration, as was noted by F2.
“Now we have become really good friends and can trust each other. Whenever a new business item comes up, I contact my ex- or current collaboration partners to discuss it. They give quite honest opinions on my idea. It is great that I have somebody in the same field to consult on my business items from a global perspective (F2, CEO).”
Some interviewees emphasised the image-building effect; the history of international R&D collaboration improved the brand image of the SMEs, which benefited not only from the marketing and sales of their products but also from the support obtained from various government programmes for facilitating international R&D collaboration among SMEs. While different patterns of costs and benefits could be observed for different motivations, those indirect outcomes were more notable and visible for
collaboration among SMEs, regardless of the type of motivation.
“After we were funded by the government for a collaborative R&D project, we realised that other funding opportunities for international R&D collaboration exist both in Korea and Europe. Apart from R&D, there were other types of funding programmes available to commercialise our collaboration outcomes. Once, a government agency contacted us to ask if we were interested in a particular collaboration project. Without the first collaborative R&D projects, we could never have taken all these subsequent opportunities (F12, CTO).”
Secondly, technology exploitation-related benefits, which include localisation of technology, reduced cost on import, reduced time for technology commercialisation, and reduced time for entering a global market, do not have a statistically significant impact on the level of satisfaction. Although the existing studies emphasised the importance of SMEs’ collaboration at the commercialisation stage due to their lacking capabilities for that stage, (e.g., Lee et al., 2010), this argument does not seem to apply to the international collaboration among SMEs. The benefits from such collaboration is realised only in the limited number of SMEs targeting globalisation. Furthermore, collaboration for technology exploitation may require frequent interactions and intimate relationships between members, which may cause various difficulties. Thus, not all SMEs that had technology exploitation-related benefits were satisfied with the collaboration results. Another possible explanation is that SMEs involved in international R&D collaboration might have had a high expectation on the possibilities of technology exploitation in the global market, and thus this high expectation could have a negative effect on the level of satisfaction. According to the satisfaction discrepancy theory, the level of satisfaction is affected by the discrepancy between expectation and performance (Locke 1969); satisfaction with collaboration is considered a function of expectation and deviation from expectation.
Third, SMEs that experienced more difficulties related to the production costs (i.e., R&D costs and sharing collaboration outputs) showed the lower level of satisfaction. In particular, the project costs included not only those for financial resources but also for human resources. In our case studies, SMEs tended to be funded by their governments or the European Commission (EC), if they are European countries, in their collaborative R&D; without such funding, they tended to use their human resources for collaboration. By accessing human resources in a partner firm, they could reduce their production costs.
“We assigned two of our engineers to a collaborative R&D project for six months. An opportunity cost was incurred regarding the salaries we are paying to them (F4, CTO).”
Therefore, even when no financial resources were invested in the collaborative R&D, without strong commitments from the partners, SMEs seemed to feel that the production costs could not be reduced to a satisfactory level. Indeed, most interviewees mentioned difficulties in ensuring commitment from the partners as follows.
expected to get the data. And so we generated the data ourselves, which increased the burden of this project and decreased the benefits of international R&D collaboration (F12, CTO).”
“I was in charge of the project. It was quite hard to contact them. Whenever I needed some feedback from my collaboration partner, I wrote an e-mail to a liaison person. Without exception, it took ages to get a reply from him, which delayed the project on our side. On average, we had only two days per week that we could work together because of the differences in date systems, holiday systems, and time zones. If we missed the two days, we had to wait five more days to contact them (F1, PM).”
The costs incurred in dealing with changes and risks during the collaboration may cause certain difficulties in the reduction of production costs, although these were not frequently observed. However, compared to MNEs, SMEs have proportionately less stability in their business, which may adversely affect a partner SME. One interviewee commented on his experience of the bankruptcy of his partner company as follows:
“Three companies were carrying out the collaborative project and suddenly one of our partners went bankrupt. As we had already invested a large amount of effort in the project, we could not stop it, though we could manage to continue the project… (F1, CTO)”
Fourth, transaction costs, being mainly related to finding potential partners and coordinating collaboration activities to create synergies, were not found to be significant in determining the level of satisfaction. Various approaches to identifying potential partners have been adopted, with different criteria being applied to choose a final partner in different organisations and projects. If SMEs, having little information about potential partners, need to approach international partners directly, the search costs tend to increase. In contrast, if collaboration is initiated by a partner company or an intermediary, the search costs are generally less. In our case, government policy programmes have focussed on reducing these search costs by hosting a match-making event in Korea, taking Korean SMEs abroad to introduce them to potential partners, or hiring an intermediary to facilitate such match-making. Through such a channel, SMEs were able to find reliable partners and could be insensitive to the transaction costs.
Finally, management costs were found to have a positive impact on the level of satisfaction, which is different from what one might expect. Language and geographical differences were not regarded as particularly serious issues. Indeed, direct interactions between engineers were not observed frequently during international R&D collaboration among SMEs. Instead, each company had a person responsible for liaison, facilitating and managing the collaboration. They usually speak fluent English and are senior managers, capable of decision-making as well as detailed discussion regarding the target technology for the collaboration. Furthermore, the English required for an R&D collaboration mainly involves technical and professional terms that are relatively limited in number, greatly decreasing the complexity of communication. On the other hand, more difficulties may indicate more interactions, which are likely to increase the synergies of collaboration and ultimately the level of satisfaction. Furthermore, the more difficulties SMEs experience, the more learnings they earn; they expect the reduced costs for further projects because of those learnings, leading to the positive effects on the level of satisfaction.