Knowledge and intellectual capital in internationalizing SMEs, case study in technology-based health companies
| Date | 31 July 2020 |
| Pages | 219-242 |
| Published date | 31 July 2020 |
| DOI | https://doi.org/10.1108/JIC-02-2020-0048 |
| Subject Matter | Information & knowledge management,Knowledge management,HR & organizational behaviour,Organizational structure/dynamics,Accounting & finance,Accounting/accountancy,Behavioural accounting |
| Author | Amir Zakery,Mohammad Sadegh Saremi |
Knowledge and intellectual capital
in internationalizing SMEs, case
study in technology-based
health companies
Amir Zakery
Iran University of Science and Technology, Tehran, Iran, and
Mohammad Sadegh Saremi
Technology Studies Institute, Tehran, Iran
Abstract
Purpose –International businesses play a significant role in the growth, innovation and survival of
technology-based firms (TBFs). Creating new opportunities in international markets, using communication
networks and confronting constraints on available resources have distinguished the internationalization of
small and medium-sized enterprises (SMEs) and intensified the importance of knowledge acquisition and
continuous learning. This study aimed to (1) configure (the types and sources of) and (2) measure the
internationalization knowledgeof TBFs, by focusing on a knowledge-intensive part of the health industry in an
emerging country: Iranian advanced medical equipment companies.
Design/methodology/approach –For this purpose, a qualitative approach was adopted to interview the
leaders of eight TBFs exporting medical equipment. Obtained data were investigated using content analysis.
Findings –According to the content analysis results for configuration, technological knowledge and market
knowledge were mainly obtained through direct experience and vicarious learning; however,
internationalization knowledge is not so established as the third major knowledge area to integrate
technological with market knowledge in line with corporate strategies of an internationalizing firm. For
measurement of knowledge assets of internationalizing firms as a prerequisite for continuous improvement,
several intellectual capital indices were extracted, including human, structural and relational capital.
Originality/value –This research complements existing literature in internationalization knowledge
configuration via deploying an "Intellectual capital" perspective. It could enhance efforts for improving the
learning of internationalizing SMEs, especially in the developing countries.
Keywords Internationalization, Knowledge acquisition, Intellectual capital, Learning, technological
innovation
Paper type Research paper
1. Introduction
Nowadays, international business is an undeniable concept in the global economy and trade.
International business discussions used to focus on mostly multinational companies and their
role in international investment and technology transfer; however, a great deal of attention is
now also paid to SMEs (Lu and Beamish, 2001). Major national advantages of SMEs include
job creation, wealth distribution, opportunity utilization and fast innovation and adaptation
(Ansari et al., 2018). Both developed and developing states try to establish different policies to
encourage SMEs to enter the international business arena (Pickernell et al., 2016;Cusmano
and Koreen, 2019).
Technology-based companies are among the health sector leading enterprises, which are
mainly involved in the design and production of medical equipment and medicines. Although
large corporations are major actors in this field, many technology-based SMEs are striving
for specialization and innovation in small markets. Given the short life cycle of medical
devices (18–24 months), the presence of such companies is of paramount importance. Small
companies are trying to maintain long-term sustained competitiveness by focusing on
disruptive innovations (instead of incremental innovations) and enhancing product
Intellectual
capital in
internationalizing
SMEs
219
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1469-1930.htm
Received 25 February 2020
Revised 27 April 2020
8 June 2020
Accepted 8 July 2020
Journal of Intellectual Capital
Vol. 22 No. 2, 2021
pp. 219-242
© Emerald Publishing Limited
1469-1930
DOI 10.1108/JIC-02-2020-0048
differentiations (Clairfield International Luther, 2018). Internationalization of manufacturing
companies in a knowledge-intensive industry like Healthcare is a necessity for their
continuous growth. However, they should cope with products’co mpetitiveness and
institutional arrangements and regulations as key influencing factors in this process
(Heiss, 2017).
Knowledge is an essential requirement for the internationalization of companies. The
issue of organizational learning is generally considered one of the most important
orientations in international business literature. The role of empirical knowledge and
learning has been highlighted in incremental or behavioral internationalization models such
as the Uppsala model (Eriksson, Johanson, Majkg
ard, and Sharma, 1997;Johanson and
Vahlne, 2009). It is crucial for SMEs to learn different knowledge acquisition techniques and
internationalization skills, because these companies, especially in developing countries, are
unable to allocate substantial resources to international knowledge development (Mejri,
MacVaugh, and Tsagdis, 2018). Therefore, they mostly gain the knowledge they need by
establishing networks and using the capacities of other actors. In general, the main capital of
SMEs, especially TBFs, to succeed in the international arena is their intellectual capital. It
enables them to tailor their products/services to market needs, determine the terms of sale,
obtain necessary licenses, link with active partners and manage their presence in the target
market. Assuming that internationalization knowledge can explain and reveal some aspects
of international corporate performance (Jardon and Molodchik, 2017), measurement of
knowledge assets and intellectual capital help companies improve their international
performance.
The main purpose of this research is to investigate the knowledge configuration
(knowledge types and learning modes) of exporting technology-based health companies in
Iran. Extant literature discussed three types of technological knowledge, market knowledge
and internationalization knowledge, as well as different learning modes for exporting
companies (Saarenketo et al., 2004;Fletcher and Harris, 2012;Fletcher et al., 2013). The
learning modes that are less affordable for companies in developing countries have also been
explored in a study by Mejri et al. (2018). This research aims to explore knowledge/IC
configuration of companies in an emerging context with focus on a technology-based sector
with considerable domestic knowledge assets but resource constraints and limited
international cooperation. So the research questions are: (1) how knowledge of
internationalization is configured in Iranian technology-based health companies? and
(2) which indicators of human capital, structural capital and relational capital are required to
measure and improve knowledge assets for internationalization? In a developing country
with considerable domestic technological capabilities but less international cooperation with
developed countries like Iran, we assume that a balanced IC measurement system would help
companies to leverage more various learning modes to accelerate international success. A
qualitative in-depth approach was employed, and interviews with the senior managers of
eight exporting TBFs held and analyzed.
This study reviewed different types of internationalization knowledge and knowledge
acquisition methods in technology-based health companies. Then a framework was
developed to measure the knowledge assets of these companies for internationalization to
improve the assets and enhance international corporate performance. The results of the study
would help company managers monitor their IC assets for international growth. It also helps
policy makers to design initiatives to enhance the quality and speed of learning in exporting
SMEs and evoke more SMEs to engage in internationalization.
The remaining of the paper is structured as follows: research literature regarding
knowledge in internationalization is reviewed in section 2. Iranian medical equipment context
and selected exporting companies are introduced in section 3. Then, the results of interviews
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