The use of NDAs in the IT service sector

Business people are advised to use contracts for the protection of their assets when entering business transactions with other strategic partners. Non-disclosure agreements (NDAs) are examples of such contracts that limit what those with access to certain knowledge can do with the privileged information. However, knowledge is constantly changing as soon as someone gains knowledge and adds personal knowledge to that knowledge. As such, the NDA may be redundant soon after it is signed. IT service professionals realize the boundless nature of knowledge and regularly work with professional colleagues to provide technical services to their customers. I provide a qualitative analysis of interviews with four IT service professionals on their use of NDAs in formal business transactions and in informal consultative sessions. I find positive attitudes toward the use of NDAs in formal business transactions such as in strategic partnerships but limited use of NDAs in informal consultative sessions.     

The link between innovation and productivity in Estonia's services sector

This paper investigates how the innovation–productivity relationship differs across various sub-branches of the services sector. The Crépon, Duguet and Mairesse structural model is used, consisting of equations for innovation expenditures, innovation output, productivity and exports. The data are taken from the Community Innovation Surveys for Estonia. It is shown that innovation is associated with increased productivity. The results indicate, surprisingly, that the association between technological innovation and productivity is stronger in the less knowledge-intensive service (KIS) sectors. Non-technological innovation plays a positive role especially in KISs. An indirect channel of the effects of innovation on productivity appears to function through increased exports.     

Open innovation practices in SMEs and large enterprises

Few studies on open innovation (OI) address OI practices in small and medium-sized enterprises (SMEs) and how their use of OI and the resulting benefits differ from those of large enterprises. The lack of resources in SMEs to engage in looking outward is said to be a barrier to OI, but at the same time this shortage is cited as a motive for looking beyond organisational boundaries for technological knowledge. We investigate how OI dimensions impact the innovative performance of SMEs in comparison to large companies. The key finding is that the effects of OI practices in SMEs often differ from those in large firms. SMEs are more effective in using different OI practices simultaneously when they introduce new products on the market, whereas this is less the case for large firms. Turnover from new products in SMEs is driven by intellectual property protection mechanisms, while large firms in this case benefit more from their search strategies.     

Firm growth and innovation

In recent years, there has been an increase in empirical and theoretical work that addresses the role of innovation as one of the main sources of firm growth. The purpose of this special issue is to strengthen the role played by innovation as a determinant of firm growth. Despite the emergence of a vast empirical literature on whether innovative firms grow more quickly in terms of sales and employees, a number of crucial questions and answers remain. While a large number of applied papers observe a positive link between innovation and firm growth, the complexity of R&D activities, together with the diversity of innovation strategies and the multiplicity of growth modes, requires a multidimensional approach to examine the contribution of innovations on firm growth. To shed light on the link between firm’ growth and innovation sources, we organized a meeting of leading scholars of firm’ growth and innovation. The papers of this special issue were presented at the workshop on ‘Firm growth and innovation’ held on 28 and 29 June, 2012, in Tarragona, Spain. The papers that compose this special issue deal in depth with innovation activity, firm growth and the interaction between firm growth and innovation.     

Inter-organizational information systems adoption for service innovation in building sector

The building sector has experienced a significant decline in recent years in Spain and Europe as a result of the financial crisis that began in 2007. This drop accompanies a low penetration of information and communication technologies in inter-organizational oriented business processes. The market decrease is causing a slowdown in the building sector, where only flexible small and medium enterprises (SMEs) survive thanks to specialization and innovation in services, which allow them to face new market demands. Inter-organizational information systems (IOISs) support innovation in services, and are thus a strategic tool for SMEs to obtain competitive advantage. Because of the inherent complexity of IOIS adoption, this research extends Kurnia and Johnston's (2000) theoretical model of IOIS adoption with an empirical model of IOIS characterization. The resultant model identifies the factors influencing IOIS adoption in SMEs in the building sector, to promote further service innovation for competitive and collaborative advantages. An empirical longitudinal study over six consecutive years using data from Spanish SMEs in the building sector validates the model, using the partial least squares technique and analyzing temporal stability. The main findings of this research are the four ways an IOIS might contribute to service innovation in the building sector. Namely: a) improving client interfaces and the link between service providers and end users; b) defining a specific market where SMEs can develop new service concepts; c) enhancing the service delivery system in traditional customer–supplier relationships; and d) introducing information and communication technologies and tools to improve information management.     

Disentangling sector and status effects in German employment growth

From 1992 to 2006, part-time employment in western Germany has grown by 83%, whereas full-time employment has shrunk by 15%. In addition, employment schemes vary substantially across industries and industries which are themselves developed differently. The paper analyses the extent to which the divergence of status-specific employment can be explained by factors inherent in full-time or part-time employment (status effect) or by changes in the sectoral composition (sector effect). A regression-analogue shift–share model is estimated. Economic variables like unit labour costs and output gap are controlled. As a dynamic panel data model is specified, a bias-corrected least squares dummy variable estimator is used. In a second step, the fixed effects of the estimation into parameters for employment status and 16 sectors are decomposed. The results show that status-specific characteristics dominantly explain changes in employment patterns.     

Spatial spillovers and employment growth in the service sector

This article examines the impact of local knowledge spillovers on employment growth in the service sector at both the theoretical and empirical level. It is argued that, in addition to life cycle and tradability effects, spillovers in services are likely to be strongly influenced by distinctive service characteristics and labour-related factors, which impact on the channels through which spillovers are transmitted. Empirical models of employment growth suggest significant differences in spillover effects between industry and services and across public, private, business and personal services. In particular, many services appear to benefit from spillovers arising from a diverse local economy.     

Focus on practice service process innovation in the Brazilian electric energy sector

Service outsourcing has become widespread in the electric energy sector in Brazil. In this article, we present a case study of an innovative model for outsourcing management designed by a large electric energy distribution organization in Brazil, which outsources core and support business processes. This article reports how this company faced the challenges imposed after suffering serious operational problems with outsourcing companies and the innovative approach that was taken in order to improve performance and reduce safety risks. Post-implementation results corroborate the positive financial and operational consequences of the innovative model.     

Open innovation requires integrated competition-community ecosystems: Lessons learned from civic open innovation

Open innovation has received substantial business attention as a means of providing firms in hyper-competitive environments with the ability to create a stream of new products and services. For open innovation, organizing external sources correctly is a critical capability; current literature suggests that external sources should be organized either as collaborative communities or as competitive markets. While firms have generally been slow to adopt open innovation, many cities in the U.S. and Europe have been quick to embrace it—providing needed field-based experience on how to organize external sources. Based on our examination of six cities opening their data for innovation, we found that while cities often started with one or the other approach to organizing their external sources, each approach was inadequate in ways that could potentially be addressed by the addition of the other approach. Thus, we conclude with an integrated approach in which the needs of the entire ecosystem of sources and supporters of innovation are organized to address both competitive and community needs.     

Organizational innovation outcomes in SMEs: Effects of age,size, and sector

Innovation studies concentrate on factors contributing to innovation. However, governments seek clearer understanding of innovation outcomes in their appraisal of the costs and benefits of policies to promote innovation in small and medium-sized enterprises (SMEs). This study examines organizational innovation (OI) outcomes in SMEs. Based on company interviews and a mail survey, the findings reveal OI results in enhanced productivity, margin, market leadership, and working environments. However, OI does not lead to operational efficiency and employees’ retention. Organizational innovation leads to companies operating outside their core competency but does not have an adverse environmental impact. Organizational innovation has greater impact on small firms. The paper includes practical and theoretical implications.     

Key service innovation drivers in the tourism sector: empirical evidence and managerial implications

This study highlights the importance of market orientation and the use of information and communication technologies (ICT) as determinants of service innovation activity for companies in the tourism sector. In doing so, the study provides a means to classify companies as innovative or not. Using a sample of 100 Spanish firms from different branches of the tourism sector, we confirm and extend prior research. In particular, market orientation??especially a customer orientation??is critical for developing new services that lead to competitive advantages. In addition, ICT have a dual, direct, and indirect influence on service innovation.     

Determinants of ethnic minority entrepreneurial growth in the catering sector

This paper seeks to evaluate the variables which influence the growth of the Turkish-speaking ethnic minority businesses in the catering sector, in London, UK. The paper reports and analyses the findings of 111 face-to-face structured interviews with Turkish Cypriot, Kurdish and Turkish restaurant business owners. Findings suggest that fluency in English, recruitment through formal recruitment channels, and the high proportion of co-ethnic labour force makes a positive impact on business growth. The paper concludes that these determinants of growth are crucial for the ethnic minority catering entrepreneurs to gain a competitive edge in this customer focused, labour intensive sector.     

Sources of TFP growth in the Malaysian Islamic banking sector

This paper attempts to empirically analyse productivity changes of the Malaysian Islamic banking sector during the period of 2001–2004 by applying the non-parametric Malmquist productivity index method. During the period of study, the empirical findings suggest that the Malaysian Islamic banking sector has exhibited productivity progress during the earlier years before declining during the latter years. The results suggest that foreign banks have exhibited higher productivity levels compared with their domestic counterparts during the earlier years, while the domestic banks’ productivity levels were relatively higher compared with the foreign banks during the latter years.     

金融创新与经济增长的效应研究

金融创新与经济增长之间的正相关关系,已经得到多数经济学家的认同。本文通过数据图表和IS-LM模型,从分析风险投资对高科技创业的影响入手,对金融创新方式与经济增长效应程度进行系统和全面的研究。     

Exploring the link between innovation and growth in Chilean firms

We investigate the relation between the introduction of innovation and subsequent firm growth employing a dataset representative of the Chilean productive structure. By means of quantile treatment effects (QTE), we estimate the effect of the introduction of innovation by comparing firms with a similar propensity to innovate for different quantiles of the firm growth distribution. Our results indicate that process innovation positively affects sales growth for those firms located at the 75th and 90th percentiles. Contrarily, product innovation appears not to be a driver of firm performance. We also find that process innovation benefits mature firms at higher quantiles while it positively affects young firms located at low-medium quantiles.     

Technical efficiency and productivity growth of entrant firms in the retail sector in Spain

This paper analyses efficiency and productivity growth in relation to size, and age and for both entrant and incumbent firms using a birth cohort approach for the period 1995–2003 for two sectors, non-specialized shop (521) and specialized shop (524) three-digit NACE. On the one hand, our results indicate the existence of statistically significant differences among entrant and incumbent firms by size. Also, we found differences according to the start up size in relation to membership of the birth cohort and activity sectors. On the other hand, productivity growth shows that, in general, the larger entrants in the non-specialized sector obtained higher productivity than did small firms. This phenomenon was not observed in the specialized sector, where firms worsened in productivity in most of the cohorts and we did not find significant differences in productivity growth between large and small firms. Efficiency changes tend to be a positive contributor to total factor productivity change, but technical change tends to be a negative contributor for both sectors. A deeper analysis of the efficiency changes (catching up) has shown that these improvements are generally attributed to pure technical efficiency and the scale.     

Venture capital's role in financing innovation for economic growth

Previously, there has been little empirical evidence about the role of venture capital in fostering technological innovation. Recent research, sponsored by the National Science Foundation and Babson College and completed with our colleagues Stanley E. Pratt and Norman Fast (Venture Economics and Venture Capital Journal) shed some new light on the flow of venture capital to highly innovative technological ventures from 1967–1982. The evidence suggests that venture capital not only plays a significant role, but that it is a unique kind of investing in terms of when, where, and how it is done. Ironically, this research indicates that the “capital” in venture capital is the least important ingredient in fostering technological innovation. Rather, it is management intensive, requiring very early involvement by venture capitalists in nurturing budding innovators and technology, and thereby bird-dogging and accelerating the emergence of highly innovative technologies. Further, the post-1979 reduction of the capital-gains tax has led to unprecedented growth and development in the venture-capital industry. One result has been that a new industry structure is emerging, and along with it some new danger signals for the future flow and commercialization of technological innovation. Several lessons emerge from our findings that hold implications for venture capital investors and entrepreneurs alike.Successful venture-capital investing in technologically innovative firms requires more than just risk money. Savvy entrepreneurs seek out venture capitalists with noteworthy reputations for their nonmonetary, high value-added contributions to fledgling firms. Venture capitalists who can play a highly constructive role in emerging firms can attract higher-quality ventures. Qualities commonly cited by entrepreneurs are: helping to find the select key management-team members: providing credibility with suppliers and customers; and helping to shape strategy when the daily pressures postpone this vital task. As one put it, “It is far more important whom you obtain funding from than how much and at what price.”Investing in technologically innovative ventures is a more specialized business than suggested by the common stereotype of homogeneity among venture capitalists. Fewer than 5% of the 464 venture-capital firms in our study accounted for nearly 25% of all the investments in highly innovative technological ventures. Investors posses sepcialized know-how, including a web of contacts and networks, a great degree of syndication of deals, and a great intensity of involvement. The message for technology entrepreneurs is clear: focus on venture-capital firms with reputations for proven performance in your technology and market, especially with your targeted customers.Contrary to the notion that venture-capital investors sit and wait for business plans and innovative ideas to come to them and then simply write checks, many of the most active firms do just the opposite: they engage in active “bird-dogging” efforts to identify exceptional innovators with the relevant technical expertise and commitment to bring about the commercialization of promising technologies. They also team with innovators and entrepreneurs to create an “acceleration effect” by actually compressing the time span and increasing the velocity at which new technologies are brought to commercial maturity and societal utility. Founders and investors alike have related numerous examples of highly innovative technological ventures that became realities in what they believed to be one-fourth to one-half the time that would have been required within a large, established firm.Looking ahead, the new venture-capital climate of the mid-1980s offers both bane and blessing.As the pool of capital has exploded, the industry has become more diverse and specialized than even before. Sharp differences are visible in terms of investing objectives, criteria, and strategy, focusing on particular stages, size, and a technology-market niche. Megafunds of $100 + million have been raised, and as funds get larger the minimum investment escalates, typically $1 million or more now. Entrepreneurs in search of venture capital need to be more knowledgeable and focused than ever before.Significant portfolio problems continue to surface as the would-be “pearls” of 1982–1984 become “lemons” in 1985–1986. One results of this is the drying up of funds for seed and strat-up investments. Many venture capitalists are simply overburdened by cleaning up problems in their own portfolios and in replacing management. Fortunately, some innovative venture capitalists have seen opportunity in this adversity, and a handful of specialized seed and first-stage funds have been launched.Ironically, many of the trends and pressures in the venture-capital industry in the mid-1980s may inadvertently shift investing attention away from more innovative technological ventures. The implications of these changes are painful for entrepreneurs, investors, and the nations. How can technological innovation and international competitiveness be achieved of the venture-capital community is unable-or unwilling-to contribute as greatly to the funding of new innovations as it has in the past? Where will technology entrepreneurs find the risk capital and “value-added involvement” so vital to commercial success? And how can venture-capital pools provide the handsome yields on invested capital of the past if they shift investing to later-stage ventures?On the brighter side, we are still in an era of unprecedented opportunity for entrepreneurs and investors alike. Even with the sharp drop in new funds available in venture-capital pools to an estimated $2.5 billion in 1985, this is still 25 to 50 times greater than the annual flow of new venture capital during the dismal 1970s. The recent industry shake-up, coupled with a continuance of the favorable capital-gains tax, should foster a healthier, if not wiser and more disciplined, venture-capital industry during the remainder of the decade.