Knowledge-capital formation and valorisation of French SMEs

This paper focuses on French SMEs and studies their main characteristics regarding knowledge-capital formation and valorisation. We put forward what we may call a “French Paradox”, expressed by a quite important effort in terms of R&D investments and poor results in terms of innovation as measured by traditional indicators (patents). How can we explain this paradox? To answer this question, we study their strategy of knowledge-capital building (through absorptive capacity and open innovation) and valorisation (the way they transform their accumulated knowledge into innovations). We show that apart from the structural characteristics of SMEs (forms of innovation, use of IPRs, etc.), one important reason to their weak performances in terms of innovation lies in their integration within innovation networks dominated by large companies. The valorisation of SMEs’ knowledge capital (through patents and the diffusion of innovations) is thus not always achieved by the SMEs themselves but by the larger company, enriched by the specific knowledge of these SMEs.