Patterns in UK company innovation styles: New evidence from the CBI innovation trends survey

This paper reports on the results of an analysis at Centre for Research on Innovation and Competition (CRIC) of the data from the 1996 and 1997 Survey of Innovation Trends conducted by the Confederation of British Industry (CBI) in conjunction with the NatWest Bank in the UK. This is one of the few, direct surveys of innovation activity, as opposed to R&D and patenting actvity, which is conducted in the UK It is characterized by the fact that it asks responding firms to report on trends in a wide variety of aspects of their innovative behaviour. The central feature of the analysis in this paper is a factor analysis of the answers to a set of 15 questions on different aspects of innovative behaviour. This results in a three-factor solution which reveals three distinct ‘styles’ of innovation in the behaviour of respondents. These three styles are shown to be broadly applicable to both manufacturing industry firms and service industry firms in the sample, thus revealing a dimension of innovation in the service sector which is not so readily disclosed by analysis of R&D or patent statistics. Statistical modelling of the constraints and incentives influencing innovation shows that while constraints do not appear to be very significant, competitive pressure and the utilization of collaborative linkages are strongly positively associated with innovation, and especially with a more radical s o b of innovation. Ihe paper concludes that the CBI survey provides data about innovation in the UK which are not easily provided through other means. Its format allows certain aspects of innovation—particularly the similarities and differences between manufacturing and services —to be examined in an interesting way.     

Patterns of innovation diffusion and technological competition in Portuguese manufacturing and service industries

This article uses data from the Portuguese Community Innovation Survey (CIS III) to analyse the inter‐industry heterogeneity in the diffusion of innovations and level of technological competition in Portuguese manufacturing and service industries. The industries are classified with reference to the relationship between the level of participation in innovation and the strategies of innovative firms. Methods of multivariate statistics are used to synthesize the data and to group the observations into subsets. Four distinctive innovation patterns are identified, defined along the following dimensions: output‐orientation of innovation, importance of disembodied innovation, role of technologically advanced innovation and level of innovation opportunities. It is also found that high levels of technological competition tend to occur in sectors with relatively low dimension, productivity and overall investment.     

Firm size,sectors and countries as sources of variety in innovation

This paper aims at providing a comprehensive empirical appraisal of the nature, extent and sources of variety in innovation in industry across Europe. The results presented in the empirical section of this paper are based on a unique database (SIEPI) containing data drawn by the second Community Innovation Survey (CIS2) for 10 countries, 22 manufacturing sectors and three firm-size classes. This database has allowed us to look beyond the sectoral aggregate statistics provided by Eurostat and explore in detail the differences in innovation processes both within and across European countries and manufacturing industries. Further, the SIEPI database has been used to identify the determinants of the variety in innovation across Europe. In particular, the analysis focuses on the relative importance of sector-specific, context-specific and firm-size factors in driving firms’ innovative behaviours and performances.     

The Dark Matter of Innovation: Design and Innovative Performance in Dutch Manufacturing

This paper focuses on the impact of expenditures on design on the innovative performance of Dutch manufacturing firms. The competitive advantage of a firm often depends on its ability to innovate. Past research has shown that investments in research and development (R&D) can play a key role in stimulating innovation, yet relatively few studies have examined the impact of expenditures on design on innovative performance. Using a database containing 2010 firms from the Netherlands, this paper explores the association between expenditures on design and product innovation, highlighting the importance of the new range of 'downstream' innovation activities for understanding innovation performance.     

The persistence of innovation: a panel data investigation on manufacturing firms

This paper represents a contribution to empirical debate on the persistence of innovation in the firm, by exploiting an innovative panel database that, for the first time, links three waves of the Italian Community Innovation Survey with an administrative data source providing economic and financial information for firms in the Italian manufacturing sector, 1996–2003. By using both a dynamic logistic model and a Granger causality approach, we show that in order to innovate successfully it is much more important to have an adequate flow of profits during an appropriate time span rather than high profits only during one period before innovation. Our causality tests prove the existence of a dynamic interaction between innovation and profitability: successful innovation can, in the short run, generate the profitability conditions that can then enhance the financial resources needed to reinvest in new technological opportunities, thus causing the firm to persist in its innovative behaviour. We have also shown that another important source of persistence is represented by past innovative experience. A firm with consolidated innovative behaviour would have a higher probability of future successful innovation with respect to a firm that occasionally (or accidentally) innovates. Persistence in innovation enables a firm to take advantage of substantial technological and organizational learning effects, which improve with time.     

EXPLAINING INNOVATIVE ACTIVITY IN SERVICE INDUSTRIES: MICRO DATA EVIDENCE FOR SWITZERLAND

In this paper, we analysed empirically the innovative behaviour of firms in the Swiss service sector building on the wide consent in economic literature that demand prospects, type and intensity of competition, market structure, factors governing the production of knowledge (appropriability, technological opportunities), financing conditions as well as firm size are the main determinants of a firm's innovative activity. For the empirical work, we used firm data from nine service industries collected by the Swiss Innovation Survey 1999. We obtained a pattern of explanation of the innovative activity which looked quite plausible across the different types of innovation measures used (input-oriented and output-oriented innovation variables); it was also consistent to that found earlier for manufacturing. In general, the empirical model captured rather the characteristics of the basic decision to innovate rather than those of the decision to choose some level of innovative activity.     

Impediments to innovation faced by Canadian manufacturing firms

Using the findings of the 1999 Survey of Innovation in the Canadian manufacturing sector, we analyse the impediments, i.e. the problems and obstacles, that firms in the sector face when they innovate. In particular, we assess the factors which inhibit innovation, especially with regard to by small and medium enterprises (SMEs). First we try to establish the relationship between the impediments to innovation and various firm characteristics. Then we assess whether these impediments actually prevent firms from innovating or whether firms are able to overcome them.

We find that the perception of impediments to innovation vary according to firm characteristics. For example, large firms are more likely to report the high cost of developing innovation and organizational rigidities as impediments than small firms. However, they seem to have less difficulty with regard to financing innovation projects compared to SMEs. Our results also show that firms seem to be able to overcome most of the obstacles to innovation. Therefore, the impediments featured in innovation survey(s) should not be interpreted as impenetrable barriers that prevent innovation. The sole exception is organizational rigidities. Firms facing organizational rigidities are less likely to become innovative, whether they are small, medium, or large. From our results, we conclude that small firms do not face particular impediments which prevent them from becoming innovative.     

From Imitation to Innovation: The Evolution of R&D Capabilities and Learning Processes in the Indian Pharmaceutical Industry

Since the mid 1990s the Indian pharmaceutical industry has emerged as a leading supplier of generic drugs to both developing and developed countries.The movement of the Indian pharmaceutical industry along the R&D value chain represents a remarkable shift from an importer to an innovator of drugs. The Indian government's industrial and technology policies along with changes in regulation of intellectual property rights played a crucial role in shaping this development of R&D capability. Using the 'capability creation model' this paper discusses the learning processes and stages involved in this dramatic accumulation of technological capability. This analysis shows that the Indian pharmaceutical industry has followed a trajectory from duplicative imitation to creative imitation to move up the value chain of pharmaceutical R&D. Finally as a result of changes in patent law the industry is learning to develop capabilities in innovative R&D. The basic and intermediate technological capabilities gained from imitative learning gave these firms a solid base for development of competence in advanced innovative R&D. These findings have implications for government policies as well as firm strategies in other developing countries albeit with some limitations due to global harmonisation of patent laws being promoted by the World Trade Organization.     

Understanding co-operative innovative activity: evidence from four European countries

We investigate co-operative innovative activity in four major European countries, France, Germany, Spain and the UK, using internationally comparable firm-level data for manufacturing and service sectors. We examine the roles of knowledge flows, cost- and risk-sharing and public financial support in firms’ decisions to collaborate. Our results suggest that firms which place greater value on external information flows are more likely to co-operate with the research base than with other firms and that firms facing appropriability problems are more likely to co-operate with the research base and with upstream and downstream firms than with direct competitors. We find evidence for Spain to suggest that firms collaborate to overcome risks and financial constraints. We also find that receipt of public support is positively related to undertaking collaborative innovation. In line with the focus of policy, this relationship is strongest for co-operation with the research base.     

Who wins from innovation?

In this discussion paper the pcstion, 'who wins from innovation?', is interpreted i n terms of nations or regions rather than in terms of firms . In each case the body which spends money on R&D or other investment in technical change should ensure that benefits will accrue to the people to whom the body is accountable—the shareholders in the case of firm, the electorate in the case of a government. In the latter case, the key concept is 'regional appropriability'. Though simple, it is often overlooked. To help achieve greater regional appropriability, five, possible lines of approach are suggested: first, effective handling of intellectual prclperty matters; .second, local employment generation; third, contexted technology; fourth, valorization of diversity; and fifth, regional innovation networks.     

The role of codified sources of knowledge in innovation: Empirical evidence from Dutch manufacturing

This paper explores ongoing debates about the role that codified forms of knowledge play in fostering innovative behaviour. It aims to provide an empirical exploration of the use of codified sources of information for innovation at the firm and sectoral level. Despite considerable interest in David and Forays (1995) work on the codification of knowledge and the changing nature of innovation due to the use of information and communication technologies, there are relatively few empirical studies that probe the role of codified sources of information in the innovation process. Our goal is to assess how important codified sources of information are for innovation among different firms and sectors. We find that use of codified sources of knowledge is highly concentrated in high technology sectors and among firms with existing absorptive capacity. The analysis shows that the use of other sources of information for innovation is a strong predictor of a firms use of codified sources. The data used for the analysis is based on The Netherlands Community Innovation Survey (II) for the manufacturing sector and covers over 2001 firms in 11 industries.JEL Classification: L60, O32, O33     

Local variety and innovation performance in the EU textile and clothing industry

ABSTRACT

A large body of the literature showed that related variety at local level is more relevant than unrelated variety for explaining the innovation performance of firms. Knowledge relatedness is usually measured by considering activities within the same industry (i.e. the same two-digit code) while activities in different industries are associated with unrelated variety. This approach is challenged by the increasing relevance of transversal technologies, i.e. technologies that are developed and applied in rather different sectors. As a result, between industry variety (i.e. unrelated variety) is expected to be more important than within industry variety (i.e. related variety). We test this hypothesis by examining the innovation activities of firms in the textile and clothing industry. The innovation model of these firms is characterized by low investment in R&D, little capabilities for autonomous innovation and dependence from knowledge suppliers belonging to different sectors. The empirical analysis, carried out over the 1996–2014 period at the EU NUTS2 level, shows that between industry variety has a greater impact than within industry variety for the innovative performance of firms.     

The organisation of innovation: collaboration, cooperation and multifunctional groups in UK and German manufacturing

Marked differences exist between the institutional and socialcontext for innovation in the UK and Germany. The question addressedhere is how these different contexts affect the objectives andorganisation of innovation in UK and German manufacturing. Inparticular, the paper examines the extent to which UK and Germanplants engage in inter-plant collaboration and cooperation andmultifunctional working as part of their innovative activity,and explores the reasons for differences in these patterns ofinvolvement. The investigation is based on a large-scale, comparativesurvey of manufacturing plants in the two countries. In Germany,institutional and social norms are found to encourage collaborativeinter-plant innovation, but aspects of the German skills trainingand industrial relations systems make the adoption of more flexibleinternal systems more difficult. In the UK, by contrast, themore adversarial nature of inter-firm relations makes it moredifficult to establish external collaborations based on mutualtrust, but less restrictive labour market structures make iteasier for UK plants to adopt multifunctional working. Thisis linked to differences in attitudes to the property rightsand transaction cost problems inherent in innovation.     

Marketing and r&d strategies for biotechnology firms in the usa

This pape reports on a survey of 64 biotechnology firms in the USA about their R&D strategy, marketing focud and sources of technology. The survey explored the interrelationships among the strategic issues and how they were related with the means of appropriating R&D results. Three stralegic clusters for technology acquisitin emerged from the data: (i) internal developer, (ii) joint developer, and (iii) cooperative financed. Three marketing clusters were: (i) market penetartor, (ii) innovative marketer, and (iii) market developer. The R&D clusters were: (i) defensive strategy, (ii) aggressive strategy, and (iii) research-intensive strategy. External sources of technology appeared to be predominant among thje various firms and apparently marketing strategy and source of technology had no significant relationship. Most of the firms were involved with commercial innovation in their R&D strategy and few were research specialists. Innovative firms were inclined to depend on external sources sources of technology. Issues related to appropriability of R&D results for the different groups have been examined for their implications for public policy.     

Configurations of innovation: predictable and maverick modes

This study reports on an investigation of modes of innovation in 43 firms in six industrial sectors: (i) pulp and paper; (ii) computer. services; (iii) pharmaceucticals; (iv) apparel; (v) metallic products; and (vi) financial brokerage services. A model incorporating context, process, strategy, organization and performance variables was built to serve as a base to identify empirical conjfigurations of models of innovation. Configurations are gestalts of variables that describe particular modes of innovative behaviour. The model includes uariables representing context, process, strategy, organization and performance. Modes of innovations were found to he highly sector-specific. In fact, most firms innovate in predictable ways, in conformity with the logic of innovation in their industrial environment. A significant minority of firms, however, adopt maverick behaviours, similar to modes of innovation that prevail in other industries. Modes of innovation thus cut across industry lines as a result of firm's combetencies, competitive situationes or managerial preferences. A taxonomy of modes of innovation cutting across industry lines is presented. The configurations which emerged from the data analysis were: science-based product innovators; (ii) entrepreneurial fast-track experimenters; (iii) global cost leaders; (iv) lethargic reliance on information technology and (v) on process adaptation.     

Complementarities in innovation policy

This paper develops a framework for testing discrete complementarities in innovation policy using European data on obstacles to innovation. We propose a discrete test of supermodularity in innovation policy leading to a number of inequality constraints. We apply our test to two types of innovation decisions: to innovate or not, and if so, by how much. We find that the evidence regarding the existence of complementarity in innovation policies depends on the phase of innovation that is targeted (getting firms innovative or increasing their innovation intensity) as well as on the particular pair of policies that is being considered. The two phases of the innovation process, i.e. the probability of becoming an innovator and the intensity of innovation, are subject to different constraints. Interestingly, there seems to be a need to adopt a package of policies to make firms innovate, while a more targeted choice among policies is necessary to make them more innovative.     

Configurations of innovation: predictable and maverick modes

This study reports on an investigation of modes of innovation in 43 firms in six industrial sectors: (i) pulp and paper; (ii) computer. services; (iii) pharmaceucticals; (iv) apparel; (v) metallic products; and (vi) financial brokerage services. A model incorporating context, process, strategy, organization and performance variables was built to serve as a base to identify empirical conjfigurations of models of innovation. Configurations are gestalts of variables that describe particular modes of innovative behaviour. The model includes uariables representing context, process, strategy, organization and performance. Modes of innovations were found to he highly sector-specific. In fact, most firms innovate in predictable ways, in conformity with the logic of innovation in their industrial environment. A significant minority of firms, however, adopt maverick behaviours, similar to modes of innovation that prevail in other industries. Modes of innovation thus cut across industry lines as a result of firm's combetencies, competitive situationes or managerial preferences. A taxonomy of modes of innovation cutting across industry lines is presented. The configurations which emerged from the data analysis were: science-based product innovators; (ii) entrepreneurial fast-track experimenters; (iii) global cost leaders; (iv) lethargic reliance on information technology and (v) on process adaptation.     

Knowledge Management Capabilities for Steel Makers: A British-Japanese Corporate Alliance for Organizational Learning

This paper draws on a detailed case-study of a technical alliance between British Steel Strip Products (BSSP) and a leading Japanese steel company which was established to help the UK producer improve its product quality, its production control management and its customer links with Japanese car company transplants in the UK. The study is one of a series of comparisons of leading UK and Japanese manufacturing companies, from the steel, aerospace, telecoms and chemical industries. The overall project has been funded under the ESRC Innovation Programme. Evidence of the success of the alliance is illustrated in a series of graphs depicting the reduction in scrap and steel losses from particular BSSP mill sites and clear improvements in quality and productivity levels at these sites. The case-study traces these improvements back to specific management practices transferred from the Japanese producer as part of the alliance. Detailed evidence comes from the activities of 'Task Teams' which were assembled, with engineers from the Japanese companies as team members, to identify key quality problems at the mill sites and initiate procedural changes to overcome them. Using this empirical foundation the paper explores and develops a number of key concepts believed to be increasingly important within the broader analysis of organisational change and innovation at the firm level. The corporate 'capabilities' approach and 'knowledge-based' theories of the firm are brought together to help identify differences between the two firms and explain the resulting effects on company performance. The main focus in on 'knowledge management practices', including practices and procedures governing project management, inter-divisional coordination, management roles, budgeting and resource allocation, networking and information exchange, human resource development, employee motivation and so on, in each of the firms. The study highlights important differences between the two firms in terms of how specialist knowledge is developed, deployed, integrated and exploited or 'leveraged' for manufacturing innovation (quality control improvements at the mill sites). This also encourages intra-firm knowledge flows between technical support departments, R&D and production sites. The case study of the alliance represents an unusually clear illustration of how some knowledge management practices are more difficult to transfer between firms because they are more deeply 'embedded', that is, highly dependent on broader contextual factors (knowledge resources, organisational structure, culture etc.,) to operate effectively. Broader changes are more difficult to implement and usually take much longer. Moreover, as shown by other studies looking at the transferability of Japanese management practices, some changes, though leading to performance improvements, are probably not possible and/or desirable. The study therefore provides some insights into the capacity for and limits of various kinds of organisational innovation in the British firm.