Greek and German micro, small and medium sized businesses (MSMEs) are the backbone of both the Greek and the German economy, significantly contributing to the economic performance of the two countries. In order to be able to remain competitive in a globalized world, these MSMEs will have to increase their absorption capacity, accumulate new knowledge, and reinforce their innovation effort. Therefore, the key objective of the project INNOMSME is to analyze to what extent MSMEs in Germany and Greece are able to adapt the established link between innovation and productivity increases in their firms. More specifically, this project examines the triad relationship between a) R&D and intangible capital, b) innovation output, and c) firm growth and firm productivity in MSMEs in Greece and Germany, with a special focus on micro firms as well as on fast growing firms. Moreover, the project will locate where the technological frontier for these firms is and will analyze distances between non-frontier and frontier firms in both countries. Various longitudinal survey panel data sets will enable us to empirically examine these research questions.
We will further devote special focus on the fact that Greek firms operate within the environment of a deep economic crisis since 2009. We will analyze in what direction the crisis has affected firm development and what role the innovativeness of firms has played before and after 2009. As such changes are rarely observed in advanced economies, Greece represents an important and unique case study.