Factors influencing the sustained growth of high-tech SMEs in South Korea: Perspectives of owner-managers, policymakers, and employees

Abstract

Studies of young and high-growth firms have discussed their critical roles in job creation and national economic growth over several decades. The reasons for high growth have been widely analysed but there was a lack of consideration for the persistence of high-growth firms. When high-growth firms do achieve continuous growth from inception through to maturity, it is likely to lead to job stability and more stable economic growth. This study examines the key factors influencing the continuous growth of high-tech small- and medium- sized enterprises (SMEs) in South Korea, from perspectives of the key stakeholders of owner-mangers, policymakers and employees. Previous studies about high-growth firms were relatively focused on high-tech industries and thus, the South Korean information and communications technology (ICT) industry was selected for analysis to determine the factors influencing sustained growth of high-tech SMEs. Specific high-tech industries can be affected by factors, such as national enterprise policy, industrial contexts and infrastructure. Also, these factors can be affected by owner-managers, policymakers and employees. Therefore, this study combines interview techniques with quantitative surveys and statistical analysis to identify various factors through the investigation of these three groups of stakeholders. Factors were categorised into internal factors relevant to the interrelationships within the organisation, external factors relevant to business environments, policy factors and corporate governance structure. Although participants presented various perspectives, they have some common opinions on significant factors enabling the sustained growth of high-tech SMEs. Owner-manager’s competence, employees’ contributions, and a collaborative organisational culture have been discussed as essential internal factors. Research and development (R&D) actions with financing capability and market analysis have been highlighted as critical external factors. Flexibility and continuity of public policies also affected the growth of high-tech SMEs positively. Stewardship forms of governance and behaviour acted as a critical stimulator of organisational performance. As a result, high-tech SMEs can achieve sustained growth when each stakeholder contributes as an actor to enhance these factors.