1. Research Overview and Objectives
This study analyzes the productivity effects of Technology Extension Services (TES) provided by Japan's public research institutions on small and medium-sized enterprises (SMEs), comparing the periods before and after the COVID-19 pandemic. The objective is to quantitatively evaluate the extent to which services such as analytical testing, equipment utilization, technical consulting, and education/training provided by public research institutions contribute to SME productivity improvement.
2. Research Methodology and Analytical Approach
The study employed an Endogenous Switching Regression (ESR) model, analyzing panel data from 2016 to 2023 obtained through online questionnaire surveys of SME managers and self-employed individuals. This methodology enabled proper handling of selection bias in technology extension service utilization and accurate measurement of pure effects.
3. Key Analytical Results
The average treatment effect of technology extension services showed consistently positive effects both before and after the pandemic. This demonstrates that utilization of public research institution services certainly contributes to SME productivity improvement. Particularly, it was confirmed that improved awareness of public research institutions among potential user companies has a positive impact on overall SME productivity improvement.
4. Synergistic Effects with Intangible Asset Investment
It was found that technology extension services had greater productivity effects in companies investing in intangible assets such as R&D, education/training, and digitalization. This complementarity was particularly strengthened during the pandemic period (2020-2023), demonstrating that absorptive capacity plays an important role in enhancing SME resilience.
5. Corporate Selection Behavior and Comparative Advantage
The analysis revealed that while more productive companies tend to utilize public research institutions, there were also companies with equivalent capabilities that chose not to utilize these services. This indicates that companies self-select their use of technology extension services based on comparative advantage, suggesting the importance of support measures tailored to company characteristics rather than uniform policy approaches.
6. Geographic Constraints and Digitalization Impact
Before the pandemic, physical distance to public research institutions constrained access to technology extension services. However, during the pandemic, the expansion of remote service provision through digital technology utilization significantly reduced geographic constraints. This shows that digitalization is effective in correcting regional disparities in public technical support.
7. Policy Implications and Recommendations
The research results demonstrate that public research institutions' technology extension services are effective policy tools for SME support. Particularly, improving awareness of public research institutions, strengthening coordination with intangible asset investment, and expanding digital service provision emerged as important policy issues. It is also suggested that supporting companies' absorptive capacity enhancement can strengthen SME resilience during crises.
8. Detailed Changes Due to the Pandemic
The COVID-19 pandemic brought significant changes to technology extension service provision methods and effects. The transition from face-to-face services to digital services reduced geographic constraints while further highlighting the importance of companies' absorptive capacity. This change provides important insights for the design of future public technical support policies.
9. Significance from an International Perspective
Japan's public research institution system functions as a regionally-rooted innovation intermediary, and the quantitative demonstration of its effects has important international significance. The findings of this research may be utilized in the design and evaluation of similar public technical support systems in other countries.
10. Future Research Challenges and Prospects
While this research presented new analytical methods for measuring technology extension service effects, future important research challenges include verification of longer-term effects, detailed analysis by industry and region, and effect measurement of new service forms accompanying digitalization progress. Development of specific policy measures to support companies' absorptive capacity enhancement is also required.