This report provides a review of the ways in which businesses, particularly small firms, access knowledge.

Key findings:

• Most firms access knowledge from overseas sources. International knowledge sourcing is associated with innovation and growth.
• Levels of international knowledge sourcing vary according to the size of firms – smaller firms tend to be disadvantaged.
• Our case studies confirmed the value of networking and external knowledge sourcing.
• Policy recommendations include: helping small firms to identify and use international agent, and giving them the support they need to access the knowledge needed; and making support available to help SMEs engage with emerging economies including China and India.

Drawing knowledge from external sources in the UK, or internationally, has become increasingly important to small and medium-sized firms (SMEs). SMEs cannot generate all they need to know to develop new products and processes within their own companies, they need to look elsewhere for new ideas and expertise. This practice is known as knowledge sourcing.

This report provides a detailed review of patterns of knowledge sourcing, and the key factors influencing these patterns, particularly from a small business perspective. We present key findings from a survey of 393 UK companies and analyse the results. We also highlight case studies of UK SMEs that work closely with overseas partners and agents to widen their own knowledge.

Authors:

Robert Huggins, Hiro Izushi, Nick Clifton, Sarah Jenkins, Daniel Prokop and Chris Whitfield