Exploring the role of proximity in SME knowledge-acquisition

Abstract Knowledge-acquisition activities of small- and medium-sized enterprises (SMEs) are assumed to benefit from geographic proximity to similar firms and centres of research excellence. This paper will explore the knowledge-acquisition processes and critical interfaces of innovative SMEs and outline factors that contributed to an observed lack of geographic proximity-based knowledge search activity. A growth path based upon innovation driven, rapid internationalisation and subsequent customisation strategies fostered organisational proximity-based knowledge-acquisition from international sources. It is argued that local contextual factors will determine if organisational or geographic proximity (or both) are the key to knowledge-acquisition. The recognition of a diversity of potential growth trajectories is recommended for SME policies.

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