Local Government–s Support Policy for Small and Medium-sized Enterprises and Impediments to the Diffusion of Innovation: Comparative Case Analysis of Two Small and Medium Enterprises

Abstract

This research focuses upon factors that impede diffusion of innovation of SMEs and the policy of enabling innovation by local governments. First, we clarify factors that hinder the diffusion of innovation. Secondly, we will take a case where innovation promotion was promoted by municipality’s innovation support policy of small and medium enterprises and make a comparative analysis with cases where innovation promotion does not proceed. In conclusion, we built up the hypothesis that enabling and disseminating innovation is inadequate by simply supporting subsidies, and more importantly, indirect support such as provision of knowledge resources.