ABSTRACT

This chapter explores the role of resources and capabilities in the internationalisation of innovative SMEs to China. In particular the chapter reviews the literature on resources, innovation and internationalisation. The case studies are then examined for the commonly mentioned resources, and how they assisted the firms in gaining a competitive advantage in the market. These resources were classified as tangible, which had included parent company support, presence, location in China and Hong Kong as a destination of interest. Intangible resources were also examined, in particular these included: brand, reputation, Australian origin, experience and knowledge. Human resources were also seen as imperative, with SMEs indicating some of the preferred human resources they wanted to use, which included western educated Chinese staff (Haigui), Chinese local staff, owner/manager/employees’ capabilities, external consultants and the owners/managers’ Chinese background. Finally, a range of organisational resources were also indicated, which had included technology/technical experience, online presence, Chinese language capability, flexibility/agility/size and finally the ability to think ‘new’. Interestingly the resources required by the different types of SMEs were sometimes similar, and then sometimes different, and this was categorised into a typology of entry modes. The results suggest that SMEs using different entry modes need to consider the types of resources that they need. In addition, whilst these resources were helpful for internationalisation, only some of them were also helpful for innovation.