External Technology Acquisition and Economic Performance of Small and Medium Enterprises (SMES) in Bangalore: An Empirical Analysis

It has been observed that in the current era of Globalization, SMEs resort to repeated External Technology Acquisitions (ETAs), even in emerging economies like India. Considering this, the present study has examined the factors which induced SMEs to go for repeated ETAs, and its impact on their Economic Performance (EP) as reflected in their sales turnover. This is done based on primary data gathered from 67 engineering industry SMEs in Bangalore during August-December 2011. It is the knowledge and experience gained by the SMEs over time, their in-house technological capability, resource capability, and entrepreneurial drive which together driven them towards repeated ETAs. These ETAs along with necessary firm-level innovation capability and firm-level competitiveness building, have contributed to enhance their EP. These results indicate that to accomplish successful ETAs and higher EP, SMEs must have some internal “techno-economic” strength within, as a pre-requisite. Policy intervention for technology up-gradation of SMEs deserves to be tuned towards this end, accordingly.