Title: Funding innovative SMEs operating in traditional sectors

Authors: Ronen Harel; Dan Kaufmann

Addresses: Peres Academic Center, 10 Shimon Peres Street, Rehovot, Israel ' Sapir Innovation and Entrepreneurship Center, Sapir College, Israel

Abstract: This study is a continuation of Harel and Kaufmann's research, who investigated the funding difficulties of Innovative SMEs in Traditional Sectors (ISTS) from the supply side. The current study aim is to assess the ISTS funding market-failure argument, from the demand side as well. The findings based on an analysis of case studies show similar reports of lack of funding access, despite the great diversity and variety of the companies in the sample, as manifested in their activities across an array of industrial sectors, their levels of innovation, their present lifecycle stages, and their broad size and age range. The in-depth interviews contribute to an understanding of the market failure from the personal perspective of the company executives, provided a first-ever opportunity to obtain sensitive, seldom-revealed information and data, and afforded the opportunity to shed light from a different perspective on the difficulties ISTS face in obtaining financing for innovation.

Keywords: SME; funding; innovation; traditional sectors; market failure.

DOI: 10.1504/IJESB.2022.122023

International Journal of Entrepreneurship and Small Business, 2022 Vol.45 No.3, pp.314 - 333

Received: 07 Jan 2019
Accepted: 22 May 2019
Published online: 08 Apr 2022 *

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