Crossing the Valley of Death for SMEs: Management Practices From China

Abstract

The purpose of this article is to explain and solve the early stage of High-tech small and medium-sized enterprises (SMEs) development issue in Tianjin, specifically the so-called Valley of Death. The Valley of Death is used as a metaphor to describe the relative lack of resources and expertise in the area of development. In this article, the resources and expertise mainly refer to the financing and loans required by high-tech SMEs in the early stage. Through the analysis of the actual situation of developing high-tech SMEs in Tianjin, the article illustrates organizations can bridge the Valley of Death through coordination and institutional support. The literature review and normative analysis methodology used in this study gathered data from literature and second-hand materials with extensive experience to construct the framework model of early stage development of Tianjin high-tech SMEs. Results indicate that institutional support has been very effective in addressing the Valley of Death. Implications of these findings suggest local government must understand the challenges in the valley, must facilitate the development of skills for the SMEs, and must supply the resources to SMEs.

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“…Among studies of developing markets, Vo-Thai et al (2021) show that innovativeness positively affects firm growth. Moreover, An and Zhang (2021) provide evidence that government support for innovation positively affects the survival and growth of SMEs. In a study based on quantile regression analysis, Ahn et al (2018) find that innovation activities have larger positive effects on firm growth for high-growth firms than low-growth firms.…”

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