The main purpose of this study is to identify the common characteristics of failed technology-based ventures according to the stages of growth. A large sample was used which included 2,052 firms which were designated by the Korean government as ‘governmentally-certified’ ventures. We identified 502 failed firms and compared their characteristics with those of successful ones according to stages of growth. In order to categorize stages of growth, we utilized a modified model of Kazanjian (1988). This study determined that entrepreneurs of failed ventures had significantly lower levels of education at all stages of growth. Various factors, however, influenced venture failure according to the stages of growth.

This paper studies the supply and demand of Industrial Technology Labor-force(ITL) and analyzes the determinants of ITL shortage in Korean small manufacturing enterprises. We classified the industry into four categories based on their R&D intensity like OECD; 'high technology industry', 'medium-high technology industry', 'medium-low technology industry' and 'low technology industry'. In spite of OECD's earlier data than ours, our small enterprises' R&D intensity is lower than that of OECD. But the classified industry groups are very similar to the OECD's.
For the empirical analysis we used a survey data conducted by Korea Technology Foundation. It includes 5,204 small enterprises engaged in the manufacturing industry and shows each enterprise’s current number of employees, vacancies and employees to be hired.
The phenomena of ITL distribution by technology intensity are as fellows;
The largest proportion of ITL(46.6%) are employed in medium-high technology industry, followed by the high technology industry(22.7%). It means that majority of ITL are engaged in relatively high technology areas. The medium-high technology industry records the highest proportion(49.2%) from the ITL vacancy as well. On the other hand, the proportions of current employees and vacancies are relatively low in both of medium-low technology industry and low technology industry. Therefore, it could be expected that relatively high technology industry plays an important role in ITL market.
In order to look for the working condition and imbalance of ITL in small enterprise, we measure the mobility index and vacancy rate. The mobility index indicates the movement of labor-force whatever the movement - in or out the job - is. In our small enterprises, the mobility index is highest in high technology group. The rate of vacancy is the representative index for measurement of labor-force imbalance. The rate of vacancy by technology intensity in high technology industry is higher than any other industry group. Most of our small enterprises’ ITL are placed in high technology industry, and their mobility is the highest. Therefore, it is presumed that the labor market of ITL is the most active in high technology industry.
We employ the Tobit model to identify the key determinants of labor shortage problem because the dependent variable - rate of vacancy is censored in 0(zero) which means always positive, then the OLS estimation will be biased and inconsistent. The dependent variable, rate of vacancy is defined a situation when there is not enough manpower that are needed and calculated by the ratio of vacancy of total employee(current and vacancy).
There are three kinds of independent variables expected to impact on supply and demand imbalance of ITL. One is the firm specific factor, another is the inside labor-force demand factor, and the third is the supply factor. It can be expected that supply and demand inequality of labor-force is mainly caused by difference between the labor-force quantity of supply and demand. And the firm specific factor has an impact on the both sides of supply and demand of ITL.
First, the firm specific factor includes the size of firm, geographic location and industrial location. Other things being equal, a firm which is bigger, closer to the capital region, and locates inside the industrial complex is better for demanding ITL.
Second, the inside labor-force demand factor contains per capita(employee) sales, R&D intensity, the firm satisfaction measurement with ITL, existence of research department, and the ratio of ITL to total employees. It is expected that per capita sales - the proxy variable of productivity is inversely proportional to vacancies of ITL. And if there are enough labor-force and the firms are satisfied with current employee, the demand of ITL will decrease. If the firm has a R&D department, high R&D intensity and high ratio of ITL to total employee, then the demand of ITL will be expected to increase.
Third, the supply factor includes the average wage and turnover rate which is calculated by the ratio of retiring or leaving from current employment. They can be an indicator to show the working condition. The lower average wage is and the higher turnover rate is , the more difficult it is to employ labor-force.
The key findings are as follows:
Firstly, the majority of ITL in small manufacturing enterprises are engaged in medium-high technology industry. And it shows clearly that in the industry, the bigger the enterprise is, the less serious labor-force shortage problem is. So it is suggested to support their growth to solve the labor-force shortage in small enterprises.
Secondly, in the long run, the high technology industry should play an important role in ITL market. So the policies to supply a well-educated ITL such as Master's Degree are especially effective in the high technology industry.
Thirdly, the ITL shortage problems of small business are mainly due to demand side factors such as existence of R&D department, proportion of ITL to total employment, etc. This result is interesting because at the whole manufacturing industry case which includes large firms, the main cause of ITL shortage problem was found out as the supply side factors.
Lastly, the causes of imbalance between supply and demand of ITL in small enterprises are not so different by technology categories as in the whole manufacturing. It means Korean small manufacturing enterprise is not specialized enough to divide based on their R&D intensity yet. Thus, it is necessary to support the policy to bring on the technical specialization, diversity and knowledge spillover of small enterprises. In the long run, it is important to make policies to link education and research with small enterprises' participation. Based on the findings, we discover some political meanings as follows:
Most of all, it is important to encourage their growth to reduce ITL shortage problem in medium-small enterprises. Also, the policies to supply the relatively well-educated ITL are especially effective in the high technology industry. Finally, although only a few small enterprises are active in R&D, they have to be the most important targets for the policies to relieve the shortage of ITL. That is the reason why it is the demand side factors which causes shortage problems of ITL in small business.
The aim of this paper is to identify the major characteristics and feature of ITL market of Korean small manufacturing enterprises. But it could not include the dynamic change of ITL market and clarify the difference between larger and smaller enterprise because of data shortage. Therefore, the political implication is limited to basic matters. The criterion that we used is the R&D intensity as OECD, but especially the borders in a certain industry are very ambiguous to be divided. Thus, future studies are needed to include above matters and also need further studies about the criterion of industry classification based on their technological level.

A family business may sound unfamiliar to many Korean people, but it is a business which grandly exists around the world. In fact, a family business is a very important research subject because of the following reasons: First, most independent businesses are family businesses. Second, family businesses differ from non-family businesses in terms of management goals. Third, unlike the management of non-family businesses, family business owners try to transfer ownership of the business to their children. Fourth, policy makers have carefully watched the difference in performance between family business and non-family business and have shown great interest in helping family businesses. This paper contributes to the development of the national economy by introducing the western society concept of family business to Korea, and fostering studies on family businesses, drawing the attention of the public and helping more researchers participate in the study of this area. This paper aims to answer the following questions: 1) What are the research trend and topics concerning family businesses in advanced countries? and 2) what are the core ways to facilitate the study of family businesses in Korea?
Historically, family business has played a pivotal role in developing and fostering western civilization and the very foundations of economies. Since the Industrial Revolution, however, it began to disappear due to the emergence of conglomerates and business schools. By the 1980s, family business began to be thoroughly investigated and since the late 1990s, it has moved into a growth stage. Despite its recent beginnings, studies on family businesses have come to the fore recently. Many theories on family business have been shared with titles such as systems theory, agency theory, stewardship theory and resource-based theory. Meanwhile, even though most small and medium-sized enterprises are family businesses in Korea, the research on these companies has been ignored. These days, working-level consultants including CPAs and tax attorneys have shown interest in the succession of family businesses. Due to a request from academia and small and medium-sized enterprises, international seminars on family business have been held, and related subjects and theses have been found within the realm of universities. The government has also taken proper actions such as the opening of the 'Center for Family Business Succession Support' and the 'revision of laws' to lower the taxes on the inheritance of family businesses. These changes are very desirable phenomena even though they are somewhat delayed.
To effectively examine the research trends and topics of family businesses (the first purpose of this paper), this study reviewed the literature of a total of 118 papers and articles from the internationally-prestigious family-owned business journal, the 'Family Business Review (FBR),' from 2003 to 2008. The results were as follows. First, quantitative studies were more greatly preferred to qualitative studies(conceptual), accounting for 70.3% of studies. The number of papers has slightly increased over time as well. For qualitative studies (29.7%), papers that propose a new theory or model were the majority as opposed to those that introduced conventional studies or suggested directions. Second, papers testing hypotheses accounted for a majority (45.7%) of the quantitative studies with 21 case studies (17.8%). Third, when the data that were used in qualitative studies of FBR were examined, cross-sectional data were more preferred than longitudinal data. In terms of the origin of the data, the papers in which data were collected by a researcher through a questionnaire survey were the highest (47%), followed by papers (45.7%) that used secondary data (database). With regard to the level of analysis, a corporate level of analysis (71.1%) was observed to be the most prevalent. When classified by research topic, lastly, the distinctiveness & dynamics of family businesses that include the new theory or model of a family business or complexities of family members were the highest (31.4%), and business strategy/ organizational development(22.1%), ownership/ business performance(16.9%), succession(15.2%) accounted for a great portion.
To facilitate the study of family businesses, in Korea(the second purpose of this paper), it should be recognized as an independent field of study. Joint cooperation between scholars, family businesses and consultants is essential. Also a case study would be essential to promote this project. Furthermore, in order for this new field of study to evolve into an independent field of study in business administration, the following will be necessary: First, a family business-related association such as the Family Firm Institute (FFI) in the U. S. and the Family Business Network (FBN) in Europe should be founded. Second, the development of professional educational (degree) programs and Advanced Management Program (AMP) should be developed. To help people obtain a family business-related education, furthermore, professional educational courses need to be developed. Third, systematic theory network should be established. In the West, for example, a lot of new theories have been developed because of great support from Family Business Review (FBR) and the International Family Enterprise Research Academy (IFERA). We also need to develop our own family business-related theories systematically. Fourth, the improvement of related databases should be developed. In Korea, unfortunately, the basic data on family businesses such as the ratio of family business in total industries and its role barely exist. Therefore, it is very urgent to add family business-related data to the ongoing survey (ex: Small and Medium Business Administration, etc.) or further collect statistical data on family businesses. And to facilitate ‘Family Business’ as an independent field of study, a close academia-practitioners-consultants cooperation is required. For example, academia need to focus on true needs in family business by applying clear standards and strict assessment criteria. If these efforts continue, the studies on family business could be accelerated by drawing great attention from the public. At the same time, it is necessary to improve the reputation and image of family businesses. For this, family business owners (practitioners)must make greater efforts. To improve the current negative image of family businesses in Korea, they need to promote fair and transparent management and establish a respected corporate culture as soon as possible. If loyal and respected tradition and culture are transferred to the current generation and the local community, the public will start to see family businesses good businesses. At the same time, these changes may accelerate the improvement of related tax laws and government policies. Lastly, consultants including CPAs, tax attorneys, management counselors and financial planners should learn family business-related theories systematically and apply what they learned in practice. If a close cooperation between scholars, family businesses and consultants continues as mentioned above, the future of Korean family businesses would be promising.
As Korea's first paper on family businesses to highlight research trends and topics, it would appear that this can help proliferate related studies, bring balance in business administration and create synergy. With the increase in the number of research subjects and related papers and the generalization of research topics, the effect of this paper will be doubled.

A traditional market place hosts hundreds of small stores run by self-owned business entrepreneurs and so it provides job opportunities for many people in local area. Also it is an important place because residents meet regularly while shopping and it enriches local culture. But it has faced an abrupt change since the government allowed in early 1990's the large-scale discount stores including foreign ones to do business in the pretext of modernizing retailing industry or yielding to the pressure to open the domestic market by foreign retail giants.
A discount store has advantage over a traditional market place in many aspects. It posts lower price over ed manufactured goods and provides a comfortable shopping space to draw customers. In results, the rate of speed that it infiltrated into the retail market has been unprecedented. It inflicts irreversible damage on most of traditional markets. The small stores in a traditional market suffer severely from sales decline and many of them lose business.
The government has witnessed the upheaval in retail market and was very concerned with a rapid collapse of traditional market places and ruins of small business owners. Recognizing seriousness of the suffering faced by traditional markets, it instituted a legal act in 2005 to revitalize them and so to prevent small stores from closing business. It also operated a government agency, the center for supporting traditional markets, to implement policies efficiently. As a fiscal measure, the government has poured a vast amount of money in modernizing facilities of a traditional market and in training store owners so they can adopt modern marketing skills.
Given these circumstances. the initial studies looked for the reasons for the collapse of a traditional market and proposed recommendations to support it. Shin and Moon (2003) and Kim (2004) are among them. Shin and Moon (2003) pointed natural lighting, ventilation, cooling and heating, sewage system, lack of rest rooms, and limited parking space as examples of inadequate facility. They picked old-fashioned management system, primitive marketing skill, and inactive association of store owners as operation problems. These studies mainly depend on mainly qualitative analysis with survey and interview data to draw policy recommendation. Of course, there are a few quantitative analysis about behavior of the consumer toward traditional market places (Lee 2005; Oh and Lee 2007). Lee (2005) found that aged people over 40's and female are more likely to shop at a traditional market but income level is not a factor that causes a shopper to go to a traditional market.
As long as quantitative analysis of the sales of retail industry is concerned, many preceding papers mainly dealt with the large discount stores. They investigated what would determine the sales of a discount store because its information was accessible (Lee 2004; Lee and Cho 2007; Lim and Park 2007). Lee (2004) used a simple regression to explain how various factors influence sales of discount stores. He chose population, the number of household, the number of houses in a neighborhood, regional economic activity, transportation access, competition as external factors. He also considered internal factors such as store space, brand, and parking space. On the other hand, the sales analyses of the traditional market stores have been rare because it is not easy to obtain the sales data of small stores in a traditional market. Fortunately, the center for supporting traditional market has begun to conduct annual survey for more than 3,000 traditional markets across the country beginning in 2006. The survey includes sales information of traditional markets. In facts, there had been no available sales data before the market survey began.
For this lack of sales data, until recently there were little empirical studies of how favorably the government support influences the sales growth of a traditional market. Exceptionally, Lim (2008) analyzes an effect of the government financial support on the business of a traditional market with sales data released by the center. He shows it had a positive effect on the sales of traditional markets and the number of customers using DID method.
This paper also uses the survey data released by the center to see what determines sales growth of a traditional market. The data includes other detailed informations about traits of a traditional market as well as sales. In addition, we collect the data of business environment in which it is located. They are the number of residents within a certain radius from a traditional market, the number of competitors, and the purchasing power of a local area. We take a SSM(Super supermarket) and a discount store as competitors. That is, we use both internal and external factors that influence the sales of a traditional market. Especially, we take into consideration the government support in determining sales growth.
We are concerned with growth of sales, not with sales itself. In other words, we would like to know whether the government support as well as other factors gives positive or negative effects on sale growth. Geographically, we focus on traditional markets in Seoul to analyze how various factors affect sales growth. When we use sales data, there is a problem of accuracy because the sales figure is expressed by the representative of the market, not confirmed by the tax office or an account firm. We apply a model by Blanchard and Kiyotaki (1987) to apply log-demand function. As difference of log sales over two consecutive years is sales growth, the use of sales growth as as dependent variable can mitigate an sales error guessed by the representative.
First, we regress difference of log sales on various explanatory variables. Then, we use an ordered probit model to reflect the incompleteness of sales data. It is rational to assume that the representative knows the direction of sales change though not knowing its exact annual sales amount. Therefore, we divide traditional markets in Seoul as three groups, one with growing sales, one with diminishing sales, and one with stagnant sales, and then order them. We estimate both linear sales growth regression and ordered probit.
Linear estimation shows that a registered market, a market formed by individually owned stores, and a modernized market by the government support each recorded a positive growth. We can confirm that the effort of government worked. The estimation also shows that the sales of a traditional market grew in neighbor of the town where many old houses are located. But linear regression does not tell whether competitors such as a discount store or SMS has a negative effect on sales growth. We suspect that it would be caused by the incompleteness of sales data. On the other hand, ordered probit model shows that SMS has a negative effect on sales growth but income has a positive effect. Accordingly, ordered probit is better in providing the estimation results that coincide with our expectation.

Technological innovation is widely recognized to be essential for the survival and growth of individual firms, and also for the sustainability of national and regional economic growth. There is strong evidence in the literature to support the view that technological innovation in manufacturing companies is one of the main reasons for industrial competitiveness and national development. According to several specialists, innovation is now unavoidable for companies which want to develop and maintain a competitive advantage and gain entry into new markets. Also, technological innovation is key to the economic performance of firms. Innovative firms grow more quickly and make higher profits.
If nonetheless many firms do not dare to innovate, this has to do with several types of risks and uncertainties that lead to high failure rates. The undeniable importance of innovation for contemporary companies justifies the increasing interest that researchers are taking in it. However, if the number of papers on the topic has evolved exponentially during the last decades, there is still no precise prescription for successful technological innovation.
Hence, the questions as to why some firms are technologically innovative and others are not, and what factors affect a firm's ability to innovate are fundamental to management research and practice. Namely, what determines SMEs' technological innovation?
Several researchers have tested the effect of a large number of technological innovation-related variables. However, even though they tested similar variables, they discovered differing degrees of association with the rate of technological innovation. This dispersion of outcomes may have several reasons. One may be the heterogeneity regarding samples as well as methods. Samples differ as some studies investigate one specific industry whereas others cover several industries. Methods differ, as some studies are qualitative while others adopt a quantitative approach.
A more general problem is that success or failure of projects is likely to have an impact on personal careers. People responsible for a successful project may tend to give the credits primarily to themselves, while in the case of failed projects one may try to shift responsibilities to others. The innovation process is thus still poorly understood and the current state of the literature contributes little to improving our understanding of the phenomenon. Accordingly, there is an obvious need to assess more systematically factors behind success of technological innovation.
The purpose of this study is to analyze the effects of firm characteristics(firm age, CEO's entrepreneurship, ownership structure, firm size, and innovative capability) on technological innovation using the firm level data in the case of manufacturing SMEs in Daegu region. In addition, this study will identify the relationship between technological innovation and financial performance.
This study suggests that firm age, CEO's entrepreneurship, ownership structure, firm size, and innovative capability have significant and positive effects on technological innovation of small and medium-sized firms and that technological innovation have significant and positive effects on financial performance. A questionnaire was developed to measure the characteristics of SMEs and technological innovation performance.
To test the hypotheses, data were collected from the small and medium-sized firms located in Daegu region. In order to increase the response rate, follow-up letters, emails and phone calls were used. A total 300 questionnaires were mailed. The survey data of 185 firms were collected and integrated as the empirical base for testing the hypotheses. Most respondents were from the managers.
Hierarchical multiple regression analyses were used to examine the hypotheses. Major results are as follows: Firstly, firm age was not significantly related to technological innovation. Thus, this research support neither of the previous claims, that firm age has a positive impact on technological innovation or that it has a negative impact on technological innovation. However, future research in the SMEs of other region is needed to verify whether similar results hold true.
Secondly, CEO's entrepreneurship had significant and positive effects on technological innovation. Namely, the more CEO is innovative, the more successful technological innovation will be. This study confirmed previous research result that CEO's entrepreneurship has a significant positive influence on SMEs' technological innovation. Therefore, SMEs that want to introduce successful technological innovation should have to encourage their CEO's innovativeness.
Thirdly, ownership structure had significant and positive effects on technological innovation. In other words, CEO stock ownership, employee stock ownership, foreign investors ownership, and venture capital ownership were positively related to SMEs' technological innovation. This result is similar with most of previous researches dealing with corporate governance structure and organizational innovation. Hence, SMEs should have to diversify their ownership structure to carry out technological innovation.
Fourthly, firm size had significant and positive effects on technological innovation. The debate on the effect of size on technological innovation goes back to Schumpeter's fundamental work in which he proposes two contradictory assumptions. In 1934, he states that entrepreneurs and start-ups represent the foremost source of new ideas and technologies. However, in 1942, he suggests that innovation actively increases more than proportionally with firm size. The debate was thereby launched and size became one of the variables most studied as a determinants of technological innovation. But, this research result showed that firm size has a positive effect on technological innovation. This means that large SMEs companies have more resources to innovate and support risky activities than do small SMEs.
Fifthly, innovative capability had significant and positive effects on technological innovation. The role that internal resources such as human resource play as an innovation determinant is varied. It helps companies to create, exploit and transform new knowledge into new products and/or processes. It also helps them to absorb (i.e. acquire, assimilate, transform, and exploit) new technologies appearing on the market and to attract collaborative partners. Also, doing innovation internally is particularly important for technological innovation in new-technology settings where it is very costly and particularly difficult, even impossible, to acquire new technologies produced by competitors. This research results suggested that staffing SMEs with highly educated, technically qualified and experienced personnel with diverse background is an important determinant of technological innovation. According to this research, excellent human resources help SMEs to create new technologies and absorb outside-developed ones.
Research results also suggested that technological innovation was positively and significantly associated with financial performance. This results implies that technological innovation guarantees the success of small and medium-sized firms. Previous researches on the relationships between technological innovation and financial performance in SMEs suggested two type of research results. The one is no significant, and the other is positive and significant relationships between the two variables. Researchers asserted that technological innovation of SMEs has positive influence on financial performance because technological innovation can provide SMEs with new business opportunities, first-mover advantage, market competitiveness, competitive advantage, overseas new market expansion, and long-term survival. Also, technological innovation of SMEs contribute to financial performance through the improvement of business establishment, uplift of growth possibility, market share and productivity efficiency enlargement. Especially, High production efficiency by the technological innovation can accomplish new product development which tend to offer SMEs cost efficiency and customer satisfaction.
Conclusively, these results suggested that CEO's entrepreneurship, ownership structure, firm size, and innovative capability were an important means by which small and medium-sized firms can promote innovation.
Several future researches need to overcome the limitations of this research. First, although firm age was not significantly related with technological innovation in this research, it was very important factor influencing technological innovation in previous research. Therefore Future research needs to implement different samples. Secondly, future research must consider any other governance mechanism such as rival companies to extend our research findings. Thirdly, more control variables could investigate different results on this issue in the future.

Even during and after the rapid organizational restructuring in the late 1990s, SMEs (Small Medium Enterprises) have significantly increased in number and greatly contributed to job creation and economic development. However, SMEs are less competitive competent than large corporations in terms of salary level, added value per employee, or employee productivity and these gaps are growing. To compensate, the Korean government offers financial, intellectual, and technological assistance to encourage and promote the competitiveness of the SMEs. Despite the domestic SMEs' tremendous efforts for achieving technological competitiveness, they have lacked the technological capability. This is reflected in an intensified polarization between conglomerates and SMEs. Furthermore, the degree of SME's collaboration with government sponsored R&D sector still falls far behind that of other developed countries even with government's various policies and increased investment for improving the technological innovation capability of SMEs. Furthermore, most SMEs have experienced some difficulties in managing human resources, which is a critical factor for achieving corporate technical competence. In theory, according to traditional strategic management theory or studies on technological innovation, corporations can achieve higher technology innovation through external collaboration. That is, technology collaboration positively affects technology innovation because it reduces risk and cost involved in innovation by using the established external technology collaboration network and it complements what a corporate technologically lacks. Other studies also show that technology collaboration has positive effects on the technology innovation. In practice, the government strongly supports SMEs technology collaboration with the academy or the government sponsored R&D sector to increase their technological competitiveness. This study aims to investigate the impact on technological innovation of SME's collaboration with government sponsored R&D sector and its HRM system.
First, the impact of the collaboration with government sponsored R&D sector on technological performance is examined. Those SMEs with technological collaboration show higher technological innovation. Therefore, it is predicted that SMEs’ technological collaboration is positively related to the technological performance. As the SMEs often collaborate with the government sponsored R&D sector, hypothesis is set as follows:
H1: The more SMEs collaborate with the government sponsored R&D sector, the bigger the technological innovation.
Second, this study predicts that high commitment HRM system of SMEs is positively related to technological innovation. According to the resource or knowledge based view, organizational competitiveness depends on the employees’ individual capabilities, knowledge, commitment to work, or creativity. Recent study on the SHRM (strategic human resource management) and technological innovation revealed that high commitment HRM system positively affects the organization’s technological performance. The reason is high commitment HRM system helps employees develop capacities, gives motivation, and encourages active engagement. This system allows SMEs to acquire relatively better technicians and also to maintain and develop them. Organization with high commitment HRM system can increase technological performance by encouraging creative thinking, readiness for challenge, and capacity development. This is translated into the following hypothesis:
H2: The higher the integration of the high commitment HRM system in SMEs, the better technological performance.
Third, this study suggests that the impact of SME's collaboration with government sponsored R&D sector on technology performance is varied depending on the degree of integration of high commitment HRM system. The previous studies indicate that organizational absorptive capacity engenders a positive influence on the effect of technology collaboration with an external institution. The HRM system can be seen as an internal component of organizational absorptive capacity. Accordingly, the impact of SME's collaboration with government sponsored R&D sector on their technology performance is expected increase the high commitment HRM system is more highly integrated. High commitment HRM system helps internalize the knowledge acquired from the collaboration with an external institution, thereby allows SMEs to produce their own technological innovation. In other words, the higher the integration of this system in SMEs, the bigger the positive influence of technological collaboration with the government sponsored R&D sector on the technological performance.
H3: The higher the integration of the high commitment HRM system in SMEs, the bigger the positive influence of technological collaboration with the government sponsored R&D sector on the technological performance.
The participants of this study were SMEs with employees between 5and 300. The population was the SMEs located in the national industrial complex. 1,145 SMEs were randomly ed among the total population of 16,885. Before the main survey, the preliminary test was run to examine the validity of key variables such as technology performance, technology collaboration, and high commitment HRM system. Final questionnaire was delivered to the sampled 1,145 SMEs and 622 questionnaires were collected and used in the analysis. Of total 622 samples, 39.9% (247 samples) is between 44 (3.6 years) to 119 months (9.9 years) old since foundation, 44.9% (279 samples) is between 120 (10 years) and 299 months (24.9 years), and 15.4% (96 samples) is older than 300 months (25 years). In terms of size, 5.5% (34 samples) has 5 to 9 employees, 52.9% (329 samples), 10 to 49 employees, 20.1% (125 samples), 50 to 99 employees, and 17.8% (111 samples), 100 to 300 employees. Compared to the SMEs in the population, sample SMEs are relatively large as they are chosen from the ones in industrial complex.
To measure the technological performance (dependent variable), “total innovation,” “radical innovation,” and “incremental innovation” are calculated by adding number of product and procedural innovation and improvement in last 3 years. SME’s collaboration with the government R&D sector (independent variable) is measured by the sum of 8 types of assistance from the government’s R&D sector in three years. Another independent variable, high commitment HRM system is defined as the “bundle of HRM policy focusing on the increase of employee’s capabilities, engagement opportunities, and commitment to work” and is represented by 10 items (Likert 5 scale). As for the statistical methods, descriptive, correlation and negative binomial regression are used. Causal analysis has eliminated the items with low co-relations, thereby gaining justification. According to the significance test, Cronbach’s Alpha was 0.890. Size of the organization, amount of R&D investment, and type of industry are also controlled as they can affect the SME’s technological performance.
The results revealed that both the SME's collaboration with government sponsored R&D sector and the high commitment HRM system are positively correlated to technological performance. Furthermore, there exists a positive interaction effect between SME's collaboration with a government sponsored R&D sector and a high commitment HRM system. Specifically, the impact of SME's collaboration with a government sponsored R&D sector on technological performance is greater as a high commitment HRM system is higher.
These findings make contributions to Government's innovation policy and SME's technology management. When examining the policy of SME's collaboration with government R&D sectors, government should consider SMEs' internal effort for innovation including the possession of a high commitment HRM system. Because SME's technological capability can not be increased only by R&D investment, both quantitative and qualitative assessment of SMEs should be evaluated in order to support some SMEs to be technologically competitive. For technological management, it is important for SMEs with limited internal resources and capabilities to fully employ external resources to achieve higher technological performance. The development of a high commitment HRM system will be particularly helpful for adoption of technology and knowledge from outside.

Over the years, lack of technical workers has been pointed out as the reason for the indolence of small and medium sized enterprises (SMEs) in Korea. To solve this problem, the Korean government has introduced various support measures mitigate the problem. The government and some experts see that these measures had helped to lessen the hardships that SMEs experience. However, other experts see that those programs do not have significant impact on improving the condition, accordingly, will not have such impact on mitigating the workers shortage problem. Consequently, despite the many different government support policies in existence, the problem has not been resolved. Several surveys and researches have been conducted to address the problem, but only few studies attempted to identify the reason behind the problem. Especially considering the variety of Korean SMEs, which represent 99.9% of the businesses in the country and whose workers represent 87.5% of the country’s workforce, there is probably a set of heterogeneous factors for the workforce imbalance that many SMEs in Korea are experiencing today.
In order to investigate this issue, the results of a recent survey that was carried out on about 500 SMEs were used to identify the determining factors that led to the lack of technical workforce of SMEs. In particular, we focused on the effects of the performance management system(PMS) and human resources management(HRM) system on the skill demands by the companies, and on its relevance to the workers shortage. In other words, the performance management system composed 4 types – Value, Growth, Profit, and Decline. These types were drawn from firm competitiveness compared to average industry. And the HRM system was divided to 3 types – Cost minimizing, Inducement, and Investment type. Also, this paper focused on the SMEs types, which are comprised of R&D intensity and growth stage of firm.
To estimate empirical model, we were considered the existence of workforce shortages as dependent variable and the various explanatory variables: firm characteristics, industry, demand factors, supply factors, internal skill demand, etc. In particular, this study assumed that the PMS and HRM system are among the factors contributing to the lack of technical workforce. In addition, labor demand factors such as worker’s satisfaction and the correlation between the college major of a worker and her job are considered. Eventually, this paper showed that the above mentioned factors are significant explanatory variables addressing the workers shortage problem of SMEs.
The examination that was conducted in this study showed that, putting the other imbalance factors aside, the deterministic factors contributing to the imbalance are firm size (number of employees) and geographic location of the company (metropolitan or non-metropolitan). In other words, the larger a company is, the closer it is to a metropolitan area, the more workforce it could easily attract. Also, the demand factors found to be significant are the value of sales per person, the proportion of the technology workforce to the total employees, average satisfaction of technology workforce, the correlation between college major and jobs, whether or not the company has PMS, and the firm’s inner HRM system. Also, as the high turnover means the workers have generally dissatisfaction with their jobs and create vacancies in a firm, he higher this value is, the more serious a company’s imbalance in technical workforce is observed.
As for the technological factors, the technology level of a company, research and development (R&D) costs, and E&T were found to be significant. The higher the technical level of a company is, and the more it invests in R&D and in education, the more positive these factors’ correlation with the company’s demand for technical human resources is thought to be. As for the other industrial characteristics, they were divided into different industrial types, according to Pavitt (i.e., supply dominated industry, scale intensive industry, specialized suppliers, science based industry), and were analyzed.
As mentioned above, in this study, the SMEs in Korea were classified according to their technological levels and growth stages, and the factors behind their workforce shortages were quantitatively analyzed. The technical level was classified into three types after combining one of three stages (high-, medium-, and low-technology stages) with one of four corporate development stages (start-up, penetration, growth, and restarting). The three corporate types identified were the high-tech start-ups, high-tech growing type, and low-tech increasing type based on the focus group interview results of the study on 35 SMEs that was carried out by Jang-Jun Song and Sunwoo Kim (2009).
For the further analysis, the SMEs in Korea were classified into several types particularly to identify the factors that contributed to their shortage of technological workers (see Figure 1). As a result, it was found that the deterministic factors were found to differ according to firm types. In the model, where the subjects consisted of all the SMEs, the demand factor, supply factor, technology, demand for training, and internal HRM system were found to be important explanatory variables. When the analysis focus only on the high-tech start-ups, the firm characteristics, labor supply factor, technology level, demand for training, and HRM system were only found to be significant, whereas the once significant explanatory variables such as labor demand factors failed to significantly explain the tendency of the companies's shortage in workers. Conversely, the labor supply and demand factors, and the corporate and industrial characteristics, were found to be significant for the high-tech growing companies, but technology, demand for training, and internal HRM method were found to be insignificant. This is thought to be because the companies generally have high R&D investments and share similar forms of HRM environment. Lastly, labor demand factors, technology, and demand for training were found to be significant for the low-tech developing companies, and the rest of the factors were found to be insignificant.
The results of the analysis showed that the factors that led to the lack of firm types in Korean SMEs differed according to the company type. This shows that the demand for or lack of technical workers can differ in accordance with the firm’s technological level. Second, the value of R&D investment, which indicates the demand for technical training, was generally a significant explanatory variable, and it was found that increasing such demand while carrying out vigorous R&D could increase the chances for a lack of technical workers to emerge. Third, it was found that investments in E&T could decrease the lack of technical personnel in low-tech increasing companies. Fourth, PMS and HRM types were found to be decisive factors leading to a significant shortage. This confirmed what is already apparent through statistical surveys, and showed that the shortage is affected by the internal management practices. Fifth, the turnover rate as a supply factor in our model was found to be a significant explanatory variable. When the turnover rate is high, the tendency to lack technical workers is likewise high. In addition, as opposed to the general speculation that the relatively small size of SMEs is one of the reasons for the their difficulties in securing workers, it was found to have hardly any influence it gives, which is noteworthy. Inversely, the technical characteristics or development stage (or level of maturity) of a SME, and its business management practices, represented by the PMS or the HRM systems, were found to be more important than the difference in corporate scale in terms of the workers shortage.
Therefore, the major policy implications reflected by the analysis in this study are as follows. First, supply and demand imbalances have different causes according to the types of SMEs. Thus, there is a need for customizing policy that meets the needs of each type. Second, the problem of the lack of technical workers is affected not only by the external labor market environment but also by internal demand factors, and the internal HRM system; especially largely affects the shortages in the high-tech companies. Third, as the shortage rate is significant linked to the turnovers in workers, it is concluded that a policy that supports the maintenance of skilled workers in SMEs will largely contribute to stabilizing the demand supply condition. Especially, as turnover is one of the most significant problems for the high-tech companies, addressing such problem by establishing training programs in local areas and by cooperating with large companies will contribute, too. Lastly, it can be pointed out that there is a possibility that the lack of technical workers is not only quantitative issue but is qualitative in nature. However, the quantitative side of the technical human resources supply and demand imbalance problem has been stressed. Thus, there needs to be more careful analysis of the qualitative side of the imbalance that Korean SMEs face in the future.