A Preliminary Analysis Concerning Knowledge Creation and Performance of R&D-oriented SMEs under Uncertainty

Both R&D (Research & Development) and patent applications are important activities that form the foundation of innovation creation in companies. This study analyzed the direct impact of patent application activities, which are considered outcomes of knowledge creation, on the performance of R&D-oriented high-tech small and medium-sized enterprises (SMEs) that support Japan's core industries. The results showed that for SMEs that filed at least one patent in the 2010s, as the number of patent applications increases, (i) the firm's sales per employee increases and also (ii) the rate of change of sales in the year affected by COVID-19 becomes higher. In addition, the age of the firm was found to significantly contribute to the improvement in sales per employee, suggesting that continuous knowledge creation activity tends to improve firm performance.