The effects of SMEs' R&D team diversity on project‐level performances: evidence from South Korea's R&D subsidy program

Abstract

Although there has been a lot of research on the effect of workforce diversity on innovation performance, the studies on research and development (R&D) team diversity have been scarce. Moreover, even the previous studies considered R&D performances at the firm level, which left the relationship between inputs and outputs unclear. This study aimed to investigate the relationship more precisely by examining the effect of R&D team diversity at the project level. The gender, major, and education diversities were considered and the project‐level performances were measured by four indicators: papers, patents, R&D success, and innovative sales. After analyzing 1166 R&D projects implemented by South Korean small and medium‐sized enterprises supported by government subsidies, we found inverted U‐shaped relationships between gender and major diversities and patent applications. That is, patents increased from low to moderate level of diversities (0.52 for gender diversity and 0.43 for major diversity in normalized Blau's index). However, when the diversities exceeded the moderate levels, patents decreased. Our findings provide strong empirical evidence that the ambivalence of diversity influences simultaneously and that the influences dominate differently depending on the degree of diversity. Education diversity had a linear positive correlation with paper publications and R&D success. Based on these findings, we discussed managerial implications from the perspective of R&D project managers and the funding agency.