Financing of Product Innovation by Small Firms: Case Studies in the Medical Devices Industry

摘要

The primary areas of the study were the sources of financing for medical device innovations. The averages of 10 case studies indicated that the founder and/or innovating firm contributed about one-half of the preinnovation costs, informal investors and other firms involved in the innovation each about one-fifth, and the public sale of securities about one-tenth. Many firms in the sample did not perform all the stages of preinnovation activity. Small firms seemed particularly involved in the transfer of technology from the university and/or medical research through the development of a product. The marketing of the innovation was often carried out by a larger firm. An implication of this is that statistical studies that rely on mention of the first commercial introduction of a product to identify the innovator may understate the overall role of the small firm in technological change.