, Volume 54, Issue 6, pp 369–377 | Cite as

Young SMEs as a Motor of Europe’s Innovation Machine

  • Reinhilde VeugelersEmail author
  • Annalisa FerrandoEmail author
  • Senad Lekpek
  • Christoph T. WeissEmail author
Articles Innovation Policy


Using large scale EIB Investment Survey evidence for 2016 covering 8,900 non-financial firms from all size and age classes across all sectors and all EU member states, the authors identify different innovation profiles based on a firm’s R&D investment and/or innovation activities. Basic firms — i.e. firms that do not engage in any type of R&D or innovation — are more common among young SMEs, while innovators — i.e. firms that do R&D and introduce new products, processes or services — are more often old and large firms. This holds particularly for ‘leading innovators’, which introduce innovations new to the market. To further explore why young SMEs are not more active in innovation, the authors explore their access to finance. It is concluded that young small leading innovators are the most likely to be credit constrained. Public grants seem to at least partially address the external financing access problem for leading innovators, but not for young SMEs.


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Copyright information

© ZBW and Springer-Verlag GmbH Germany, part of Springer Nature 2019

Authors and Affiliations

  1. 1.FEB (Faculty of Economics and Business)Katholieke Universiteit LeuvenLeuvenBelgium
  2. 2.Capital Markets/Financial StructureEuropean Central BankFrankfurt a. M.Germany
  3. 3.European Investment BankLuxemburgLuxembourg

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