Small Business Strategic Planning and Technology Transfer: The Use of Publicly Supported Technology Assistance Agencies

Article excerpt

This article is based on the results of a mail survey of 404 small manufacturing firms in Nashville, Tennessee, to which 123 businesses responded. The survey was developed to test a conceptual framework which describes the technology transfer process from public agencies to small manufacturers. Survival of small manufacturing businesses in the 1990s will depend partly on their ability to increase productivity through the utilization of the latest technology, use of outside consultants, and maintenance of a trained work force (Gray 1989).

Historically, overall business increases in technological capability have explained 25 percent of the increase in national income. Small firms have generated about half of all new jobs in recent years but account for only five percent of R&D expenditure (Cohen and Noll 1991, Senchack 1981). Because of limited resources, most small firms must seek external sources for technology assistance.

Technology transfer efforts by public agencies in the United States have been aimed at large firms which have the resources, technological sophistication, and long-term outlook to interface with the public agencies (Mogavero, Susskind, and Chadran 1990; Marcum 1991). For reasons of employment and competition, the small manufacturers should be included in the transfer network. Researchers from the Battelle Memorial Institute (1993) argued that throughout the 1990s there will be increased government attention at both federal and state levels to improve the technology transfer process. Because small manufacturers in the U.S. account for so much employment and because their technological lead over foreign business has all but disappeared, successful expansion of technology transfer by public agencies to small manufacturers is a critical issue of the 1990s.

BACKGROUND

Selecting technology is part of the strategic planning process. This process is impacted by changes in the external economic, political, and social environment, actions of existing and potential rivals, and the internal characteristics of the organization. Strategic planning involves using the firm's resources to best meet the changing external and internal environment. The internal characteristics of the organization affect the firm's response to changes in external variables. Technology can have a major impact on operating results (Oster 1990) and can serve as a powerful tool to gain and maintain competitive preeminence (Ansoff and McDonnell 1990).

Selecting and utilizing the appropriate technology are key elements in competitive advantage (Porter 1985). One aspect of the strategic planning process is in making informed choices. Because information markets are not efficient, selecting the "right" source for technology assistance is difficult. Wrong decisions can have a negative impact on profits.

Few studies have considered strategy content as a relevant variable in small firm planning (Lyres, Baird, Orris, and Kuratko 1993). In a recent study of 501 small businesses by AT&T, it was found that the firms did not consider technology needs in their formal planning (AT&T 1993).

Chrisman and Danforth (1993) posit that small ventures differ in many ways which result in different business problems and outside assistance needs. They note that there are a variety of different strategies that can lead to superior performance. This variety in strategies is partly caused by the inability of firms to command all the resources necessary for the optimum strategy to dominate competitors. They also found that key business success factors tend to vary by market segment. The need for new technology will vary with the strategic plan of the firm. This variation might affect the type of outside technological assistance needed and hence the selection of public agencies. Furthermore, the level of technology currently utilized in the firm might also determine the value of transfers from the agencies (Amsder and Hikino 1993). …