Synergy Mechanism Of External Network Linkage And Internal Technological Innovation Capability Of Manufacturing SMEs

As "National medium-and long-term science and technology development program" treats the enhancement of indigenous innovation capability the basic national strategy, small and medium enterprises (SMEs) which are composed of important part of national economy become the main force of national innovation and development. For a large manufacturing country of China, a great number of manufacturing SMEs, with weak technological innovation capability and core competitive andvantage,are still in the low end of international value chain.Under context of globalization and network economy, factors such as the complexity of technology, the risk of innovation and the uncertainty of market make a single enterprise lacking in total resources of innovation. The enternal resources of enterprise become more and more important to the process of innovation. SMEs which are lack of capital, human resources, and knowledge base, need more access to resources by external links for leveraging competitive competence. From external perspective, the access to resources and innovation capability leveraging of SMEs rely heavily on their embedded networks, including enterprises'linkages with firms, suppliers, universities, research agencies, intermediary service organizations and financial organizations; from internal perspective, the technological innovation capability is still the base of China's manufacturing SMEs. Leveraging of technological innovation capability is conducive to the achievement of enterprises' technology upgrading and transition, and it makes manufacturing SMEs gradually leave the low-end value chain and obtain competitive advantage. Research now focuses on the relationship between enterprises'external network linkages and innovation performance, or focuses on the relationship between enterprises' internal technological innovation capability and innovation performance. However, the problem about interaction and synergy mechanism of external resources and internal capability is less discussed. Therefore, this paper attempts to discuss the problem of interaction relationship and synergy mechanism between external network linkages, internal technological innovation capability and innovation performance of manufacturing SMEs. Research is composed of three parts:literature review, empirical analysis, and results discussion and implication.In the part of literature review, this paper focuses on three aspects of network linkage, technological innovation capability, and innovation performance. From the first aspect, this paper discusses the connotation of network linkage, the content of actor diversity, theory basis of network linkage, and researches on the relationship between network linkage and innovation performance; form the second aspect, this paper discusses the connotation of technological innovation capability, its measurement and theory basis, and also summarizes researches on the relationship between technological innovation capability and innovation performance; from the last part, this paper discusses the synergy of network linkage, technological innovation capability, and innovation performance.In the part of empirical analysis, this paper makes use of case study and large sample statistical analysis. In the case study, this paper first introduces in detail the innovation practices of network cooperation, technological innovation capability development and innovation performance of Hangzhou Honyar Company under the research survey materials; then, by survey of secondary data and application of social network analysis method, this paper discusses the technology development, alliance evolution and network structure of China's TD-SCDMA sector alliance. Case study tries to reveal the synergy mechanism of network linkage and technological innovation capability from firm-level and sector-level. In the large sample statistical analysis, by questionnaire survey and data collection, this paper analyzes the manufacturing SMEs of Zhejiang Province. Under the application of statistical methods and structural equation model, this paper indicates relevant model assumptions and presents our conclusions on the basis of statistic analysis and verification.In the part of results discussion and implication, this paper proposes some conclusion:1, the network linkages of manufacturing SMEs which presents attribute of actor diversity have a positive effect on innovation performance. The impact of linkage actor on SMEs'innovation shows heterogeneity. In addition, the type network linkages of manufacturing SMEs have two factors, namely prominent organizations and knowledge intensive business service intermediaries, and these two factors promote innovation performance; 2, the core of innovation capability of manufacturing SMEs is technological innovation capability. It contains two dimensions of product innovation capability and process innovation capability, and promotes innovation performance; 3, the effect of external network linkage on innovation performance of manufacturing SMEs is intermediated by internal technological innovation capability. The leveraging of SMEs' innovation capability and competitive advantage relies on synergy between external network linkage and internal technological innovation capability. After discussing the weak of this research, the paper indicates that future study can focus on the expansion of internal capability elements, like market capability and organizational capability, further enriching the connotation of internal capability of manufacturing SMEs, in order to discuss the synergy mechanism of external network linkage and internal innovation capability more comprehensively and give proposals on the innovation development and competitive advantage leveraging of China's manufacturing SMEs.