A study analyzed the policies of 20 Organisation for Economic Cooperation and Development (OECD) member countries pertaining to small and medium enterprises (SMEs). Aims of the study were to assess the current role of SMEs as generators and users of innovations, to analyze the components of a favorable climate for innovation in SMEs, and to improve relevant governmental policymaking. After examining the relationship of SMEs to technological development, researchers concluded that since the majority of SMEs face inherent obstacles to use and promotion of new technologies, only a relatively small portion of SMEs are able to initiate new technological/scientific advances. Analysis of the ways in which innovators emerge in society and achieve economic success led researchers to find that the following factors are essential to stimulation of innovation: receptivity of individuals, supportive networks, adequate financial support, and protective and regulatory systems. While the considerable differences between governmental policies of OECD nations prevented researchers from formulating general recommendations to member nation governments, they were able to formulate three directions in which public authorities might modify or complement their current actions. These are promoting social receptivity, developing financial incentives, and improving the competitive and regulatory framework. (MN)