Financing Innovation in SMEs: The Role of Traditional and Digital Financial Instruments

Small and medium-sized enterprises (SMEs) have been identified as an important factor in supporting economic growth and innovation; however, businesses operate in critical financial circumstances at times. Given the above, the current essay aims to present the theoretical studies on the impact of financial tools, both traditional and alternative ones, on assisting and supporting innovation in SMEs. In other words, briefly described, the emphasis of the current essay is placed upon the importance of the above financial tool/finance as a source of growth and innovation, but also upon elucidating some determinants regarding the use of some of the aforementioned financial tool/finance as a source of growth and innovation in general, such as the nature of the enterprise in terms of its size and age, and the environment in general. In particular, in the current context, the theoretical evidences try to locate some of the gaps of the current literature concerning the above issues regarding the aforementioned theme, in order to define some of the direction for further research about the above subject, in order finally to facilitate the understanding of the relationship between the financial resources of the above businesses and their capacity to innovate. Traditionally, it has been accepted that the use of the mixed model of finance is the more efficient regarding the issue of stimulating growth and innovation.

Keywords:

SMEs , Innovation , Access to Finance , FinTech , Crowdfunding , R&D Investment , Hybrid Financing