Rethinking Research for SMEs

As business school professors, journal editors, university leaders, and researchers in the social sciences, we often assess our scholarship to determine whether it is achieving societal impact. But while past business scholarship has both informed policy and driven business practice, researchers can do much more to increase the impact of their research.

This summer, the two of us conducted an open online survey of academics and practitioners from around the globe, asking for their feedback on the challenges affecting small and medium-sized enterprise (SME) research. We distributed the survey to members of the Academy of Management, the European Council for Small Business and Entrepreneurship, the International Council for Small Business, and the board of an entrepreneurship journal.

In all, 40 academics in North America and Europe in the fields of business, economics, entrepreneurship, and management responded. In addition, we heard from 84 practitioners working in representative industries from North America, Europe, and Africa.

Our goal was to identify more and better ways to facilitate the impact and translation of our work. We hope that the results of the survey, shared below, provoke further dialogue among academics, SMEs, and other actors in the entrepreneurial ecosystem, in ways that help us collectively reconfigure our present and build our future.

Challenges Ahead for SMEs

Among those we surveyed, practitioners and academics alike recognized three serious challenges facing SMEs worldwide. One respondent summed up these challenges by saying that “there is a consensus that unskilled owners, resource constraints, and limited [foresight] of unexpected external events are the most complex SME challenges at the present moment.”

These challenges affect SMEs in three different ways:

At the individual level. SME founders often have limited specialized knowledge, entrepreneurial skills, and sectorial expertise. But they still need to make informed decisions, often quickly and under conditions of uncertainty. SME founders must be metaphorically ambidextrous, combining technical and managerial capabilities as they face their competition, adopt innovative strategies, and take advantage of digital technologies.

At the organizational level. Many SMEs possess limited financial resources and have difficulty attracting and retaining qualified, diverse workers. These limitations were magnified during the pandemic when SMEs could not access loans or investments to run, sustain, or scale their businesses. This lack of funding set off a vicious cycle that slowed socioeconomic development in cities, regions, and countries where these SMEs operate.

At the national level. SMEs can find it especially challenging to strategically manage unexpected shocks such as pandemics or natural disasters. No matter what survival strategies SMEs have in place, the lack of resources and management skills can make it impossible for their owners to foresee how external crises can affect their businesses. Entrepreneurs must be able to adapt constantly to new conditions, learning and relearning necessary skills, if they are to keep up with changing trends and build sustainable enterprises. 

Is the Glass Half-Full or Half-Empty?

Another respondent noted that “there is a mixed divergent vision about the SMEs’ challenges in the new decade among optimistic practitioners and conservative academics.” Indeed, the practitioners responding to our survey were optimistic for SMEs’ future. They stressed that by communicating and collaborating with others in the entrepreneurial ecosystem, SMEs could better exploit resources in synergistic ways, leverage digital technologies, and attract more diverse and skilled workers. SMEs could be successful, these practitioners argued, by sharing risks with partners, working collectively to support sustainable growth, promoting the well-being of their communities, and recognizing the importance of equality in society.

Practitioners stressed that by communicating and collaborating with others in the entrepreneurial ecosystem, SMEs could better exploit resources in synergistic ways, leverage digital technologies, and attract more diverse and skilled workers.

Academics, however, shared a more conservative outlook. They pointed to the fact that the COVID-19 pandemic has created an especially high level of uncertainty, resulting in lingering socioeconomic challenges that require SMEs to make increasingly longer-term and higher-risk investments to scale their businesses.

SMEs, they stressed, need to be strategic and exploit current pandemic-driven conditions. They thought that minority-owned enterprises, especially, should enhance their ability to leverage digital technologies and raise funding. But most important, academics emphasized that SME founders must exercise caution and manage risk if they want to succeed.

The Topics Most Overlooked

We asked both practitioners and academics to identify the topics from their respective environments that were either underresearched by academics or overlooked by SME founders. From this, we distilled the three themes common to each group. As expected, these themes overlapped in some ways, diverged in others.

The practitioners’ responses coalesced around these three themes:

Technology management. Practitioners believed that far more attention should be paid to identifying and teaching best practices regarding technological adoption and digital transformation. This would be especially crucial for founders who might otherwise ignore or distrust the benefits of big data, data analytics, and digital platforms.

Human resource management. Practitioners emphasized that there is a lack of recognition of the diversity, equity, inclusion, and well-being of employees at organizations in their industries. They were particularly concerned about the potential implications that ignoring these themes could have for companies, in areas such as developing innovative products and services, creating nontoxic work climates, or achieving sustainable growth.

Market dynamics. Practitioners also pointed to a lack of recognition of SMEs’ contributions to their industries and their positive impact on society.

Expressing slightly different viewpoints, academics’ responses coalesced around these three themes:

Strategic management. Academics believed that SMEs often pay too little attention to issues such as attracting and retaining talented employees and hiring generationally diverse employees. Having a rich, diverse pool of talent is particularly important, academic respondents noted, if SMEs are to achieve performance objectives and build sustainable businesses that will thrive in future markets.

The interplay across entrepreneurial contexts. Academics said that SME founders too often do not understand the interplay between their businesses and the regulatory and cultural contexts related to each stage of the entrepreneurial life cycle (inception, startup, growth, consolidation, and discontinuation).

Research design. Most academics expressed their concerns regarding the methodologies used to study SMEs. Too many studies, they argued, fail to link analyses of SMEs to foundational business theory, missing opportunities either to validate current theoretical arguments or to generate new best practices. They also pointed to weaknesses such as the need for better qualitative and quantitative tools to produce more credible and replicable findings, as well as the lack of multinational samples to support better understanding of the international climate for small and medium-sized enterprises. The consensus was that if academics do not address these concerns, the translation and relevancy of their work will suffer.

Rebuilding the Link Between Research and Practice

These responses suggest that there is insufficient intersection between academic research and the work of SME practitioners. Only by strengthening that intersection can we help SMEs succeed. “The main matching points between academics and SMEs,” said one respondent, “are related to the exchange of best practices/solutions, the possibility [of providing] updated skills, knowledge transfer via collaborative projects, and access to services provided by all university infrastructures.”  

Through our analysis, we identified four ways that academics can better facilitate connection between these two divergent worlds. We can:

• Translate academic research into formats that practitioners can use to maintain competitive advantage, ensuring a flow of best practices from academics to SMEs.
• Update the skills and knowledge within SMEs by delivering lifelong learning and customized employee training programs.
• Transfer academics’ specialized know-how to practitioners through collaborations in innovative research projects or consultancies focused on solving specific difficulties in an organization or industry.
• Provide SMEs access to the university services they will find most valuable during the start-up and scaling-up stages, such as incubators, accelerators, and technology transfer offices.

Lessons and Potential Actions 

One lesson that emerged from our survey is that we must strive to overcome barriers that still exist between researchers and the owners and managers at SMEs. Survey participants recognized a multitude of impediments that arise from insufficient understanding of challenges, a resistance to change, and a lack of synergy between the two worlds. To overcome these barriers and provide valuable solutions to the challenges SMEs face right now, we must look for ways to remove institutional obstacles.

Business schools are especially well-positioned to bridge this gap—this is a goal that’s in line with AACSB’s 2020 business accreditation standards. Sue Lehrman, dean of the William G. Rohrer College of Business at Rowan University in Glassboro, New Jersey, shares several examples for supporting entrepreneurial innovation that are worth exploring given that “societal impact threads throughout all nine [AACSB] standards.” In an open letter, AACSB president and CEO Caryn Beck-Dudley challenges the 900 AACSB-accredited schools worldwide to find new and better ways to have a positive impact on society “through strategic planning, curriculum, research, and internal and external activities aligned with their unique missions.”

Researchers should allow the needs of the end user or SME to inspire their work. That stands in stark contrast to the knowledge-driven approach that’s more prevalent among business scholars today.

Pragmatically, there are three simple shifts researchers can make to better position their work to have a positive societal impact, as they support SMEs or pursue other worthy goals:

Design research with impact goals in mind. Making impact a priority from the start of most research projects will greatly help position the work for success.

Embrace a problem-solving approach to research. In SME scholarship, researchers should allow the needs of the end user or SME to inspire their work. That stands in stark contrast to the knowledge-driven approach that’s more prevalent among business scholars today, which focuses primarily on advancing science. Such an approach not only distances end users from the research questions under exploration, but also encourages scholars to translate their work to practitioner audiences only on a post hoc basis.

Intentionally translate research for nonacademic audiences. Researchers could translate their work to practice by adding a “Practical Implications” section to their manuscripts, if the publishing journals allow them to do so. As editors of the Journal of Small Business Management, we can attest firsthand that we look for papers that, in relation to their findings, clearly answer the question, “So what?”

Scholars also could create plain language summaries of their findings on a platform like Kudos, which partners with major publishers, universities, and researchers to “drive research communications, engagement, and impact.”

Impact Through Research Translation

In closing, our survey offered insight into how practitioners use our scholarly work and how scholars strategically drive the impact of their work on SMEs through their teaching and research. It is our hope these insights help researchers and practitioners connect in meaningful and impactful ways and result in more—and better—translation of research to practice.