(Purpose) This study examined the impact of government support policies on technological innovation in the service sector. Specifically, during the crisis of COVID-19 and uncertainty in the business environment, this study aimed to analyze the policy ...
(Purpose) This study examined the impact of government support policies on technological innovation in the service sector. Specifically, during the crisis of COVID-19 and uncertainty in the business environment, this study aimed to analyze the policy effects of government policies that stimulated firms' innovation activities and innovation performance. This study aimed to analyze the effectiveness of government support policies for technological innovation in the Korean service industry in the context of severe externalities of COVID-19. In addition, this study analyzed how corporate characteristics, market environmental characteristics, various government support for technological innovation, and policy characteristics affect the technological innovation process of service industry companies. (Design/methodology/approach) This study used logit analysis with data from the 2021 Korea Business Innovation Survey Service Sector of the Science and Technology Policy Institute (STEPI). The sample consisted of 4,000 firms from a total survey population of 60,111 service firms with ten or more regular employees that have been in business for the past three years (2018-2020). The dependent variable was set as continuing innovation activities in the COVID-19 situation. (Findings) The results showed that the innovation performance of the companies was statistically significant. The empirical analysis showed that the government policy during the COVID-19 period had a positive effect on the company's innovation activities. (Research implications or originality) In particular, the results confirmed that among the government policies in response to the COVID-19 pandemic, direct funding, financial support and infrastructure support influenced the sustainability of innovation. In addition, infrastructure support was the most influential government support policy. This study is judged to be a meaningful basic study in that it confirmed the policy support measures that were effective in sustaining technological innovation activities of SMEs in the COVID-19 situation.