Exploring the relationships between knowledge sources in the innovation process: evidence from Finnish innovators

Innovation is a costly, risky, and uncertain process, and one of its most central components is knowledge as has been emphasised in the innovation literature. Notably, such knowledge tends to be distributed across different internal and external sources. That is, innovation processes involve diverse relationships between knowledge that originates from a myriad of different sources such as customers, suppliers and universities. While such relationships are distinctive to modern – distributed – innovation processes, little is still known about their implications on the search for new knowledge. This paper proposes that since the innovation process is inherently an uncertain and costly activity, a deeper understanding on the relationships between knowledge sources can help firms to better master the risks and costs related to their search activities. In other words, given that not all knowledge is equally combinable with each other, it claims that complementarities among knowledge sources increase the likelihood (over non-complementarities and substitutes) that such sources encompass mutually combinable knowledge, and hence decrease the uncertainties, risks and costs involved in distributed innovation processes.     

Knowledge codification and technological innovation success: Empirical evidence from Spanish biotech companies

This paper analyzes the influence of knowledge codification on technological innovation in a sample of Spanish firms from the biotechnology sector. It tests how codification affects firms' development of incremental and radical innovations and their attempts to keep their investments exclusive by building barriers to imitation and to substitution. The work also considers the incorporation of legal protection measures. The results show, on the one hand, that knowledge codification is only beneficial for developing incremental innovations and, on the other, that firms must incorporate systems of legal protection into their codification practices if they want to keep their innovations exclusive.     

Empirical research on the different innovation engine between China and US manufacturing using an improved method

Most studies arrive at controversial conclusions about the relationship between firm size and technological innovation. Industrial differences and subjective model design are generally considered the primary cause. In static comparisons across industries, dynamic industrial changes are ignored, but this might lead to differing results when attempting to identify the driving forces of evolutionary change in an industrial environment. This study applies nonparametric regression methods with an expansive industry grouping to overcome the industry-difference interference and empirical model error, typifying traditional studies. First, a comparative analysis of the forces driving US and Chinese manufacturing is performed. Results indicate that US and Chinese manufacturing are in different industrial growth stages. Chinese manufacturing takes the traditional elements and R&D input as its main driving factors, which require objectively, expansive scale of enterprise, therefore showing characteristic Schumpeterian innovation. US manufacturing is driven by both R&D and non-R&D inputs; so it can maintain continuous innovation through cooperative networks under conditions of constant or contracting firm size.     

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 role of tacit knowledge in connecting knowledge exchange and combination with innovation

Using the Resource-Based View, this paper aims to provide a better understanding of the effect of knowledge on innovation. With this general aim in mind, we relate knowledge’s nature (tacit vs. explicit) and process (e.g. knowledge exchange and combination) to innovation. Using a sample of 105 innovative firms, we find a positive linear effect of tacit knowledge on innovation and a curvilinear relationship between knowledge exchange and combination and innovation. We also find a moderating effect of tacit knowledge on the curvilinear relationship between knowledge exchange and combination and innovation. We speculate on our findings and connect them to previous theory.     

The role of innovation in venture capital: empirical evidence from European Union and EFTA countries

This article investigates the effects of innovation attempts on the venture capital and investment activity in the cases of the selected European Union plus European Free Trade Agreement countries using annual panel data and by controlling for real income growth and business sophistication. Our findings suggest that innovation has positively significant effects on venture capital in the cases without opt-out countries (United Kingdom and Denmark); however, these effects become negative in the cases with opt-out countries. Policy implications are provided in the conclusion section of this study.     

Dynamic models of R & D,innovation and productivity: Panel data evidence for Dutch and French manufacturing

This paper introduces dynamics in the R&D-to-innovation and innovation-to-productivity relationships, which have mostly been estimated on cross-sectional data. It considers four nonlinear dynamic simultaneous equations models that include individual effects and idiosyncratic errors correlated across equations and that differ in the way innovation enters the conditional mean of labor productivity: through an observed binary indicator, an observed intensity variable or through the continuous latent variables that correspond to the observed occurrence or intensity. It estimates these models by full information maximum likelihood using two unbalanced panels of Dutch and French manufacturing firms from three waves of the Community Innovation Survey. The results provide evidence of robust unidirectional causality from innovation to productivity and of stronger persistence in productivity than in innovation.     

Establishment and embedding of innovation brokers at different innovation system levels: Insights from the Dutch agricultural sector

In the systems perspective on innovation, co-operation between several different types of actors is seen as key to successful innovation. Due to the existence of several gaps that hinder such effective co-operation, the scientific and policy literature persistently points at the need for intermediary organizations to fulfill bridging and brokerage roles. This paper aims to provide an overview of the insights from the literature on such ‘innovation brokers’, and to contribute to the literature by distilling lines of enquiry and providing insights on one of the lines identified. Taking as an empirical basis experiences with different types of innovation brokers that have emerged in the Dutch agricultural sector, it identifies a number of tensions with regard to the establishment and embedding of such organizations. The paper indicates that, despite being perceived to have a catalyzing effect on innovation, innovation brokers have difficulty in becoming embedded as their clients and/or financiers find it difficult to grasp the nature and value of their activities.     

ICT and employment generation: evidence from Turkish manufacturing

This study is said to be the first attempt in exploring the impact of information and communication technologies (ICT) capital on employment generation/destruction in Turkish manufacturing industry by using labour demand estimation framework. The analysis is based on firm-level data, which includes all firms employing 20 or more employees in Turkish manufacturing for the period 2003–2013. Our findings based on system GMM estimations show that ICT has employment-enhancing effects in Turkish manufacturing. Moreover, our results provide the evidence that tangible ICT capital has stronger employment generation impact than that of intangible ICT capital in medium- and low-tech industries.     

Influence of open innovation strategies on employment dynamics: evidence for Spanish manufacturing firms

ABSTRACT

In this paper, we explore the influence of different modes of openness of innovative firms on employment growth. Using a panel database of Spanish manufacturing firms during the period 1998–2015, we analyze the influence open innovation (OI) strategies on employment distinguishing by type of external partner. The main objective of the research is to know whether opening innovation strategy contributes to employment taken into account another firm capabilities and sectorial technological opportunities. For this purpose, a two-step procedure is specified. Firstly, a random-effect computes the effects of OI on the innovation probability. In the second step, the variation of innovativeness due to openness on GMM-system estimation controlling by potential endogeneity and unobserved firm heterogeneity is used. The results support that the influence of open strategy on employment growth is positive. Moreover, the employment depends on the breadth of OI measured by the number of out-inbound relationships. Finally, the employment consequences are different for each mode of open strategy.     

The influence of the regional context on firms’ innovation patterns: evidence from Ecuador*

ABSTRACT

Using data from the Ecuadorean Innovation Survey of 2015, this paper identifies the innovation patterns that can be found in Ecuador. In addition, we analyse the influence of the regional innovation systems in determining these patterns. The results show that there are six differentiated patterns of innovation, although they all are related to the adoption and imitation of technologies. Finally, we observe that different regional characteristics condition the way in which firms organise innovation.     

Firm innovation and productivity in Europe: evidence from innovation-driven and transition-driven economies

This article examines the links between firm innovation and firm productivity performance across a range of European economies, and in particular, we explore the differences between countries which are in transition from efficiency-driven to innovation-driven with those which are primarily innovation-driven economies. We employ an endogenous-switching technique to explore micro-economic survey-based data from both innovating and noninnovating firms. The model allows us to construct counterfactual scenarios which overcome problems of self-selection in the data. Some of the findings provide support for the traditional patterns previously found in the innovation literature, in which innovation efforts and investments in physical and human capital are found to be important for product and process innovations in manufacturing and service firms and across economy types. Our counterfactual analysis also allows us to outline a rationale for policy intervention towards noninnovating firms as well as innovating firms depending on where the transitional heterogeneity effects are greatest.     

The role of the technology barometer in assessing the performance of the national innovation system

Along with increasing significance of innovation in socio-economic development grows the need to utilize future-oriented knowledge in innovation policy-making. Foresight and road-map exercises are aimed at supporting planning and priority-setting of R&D and have become indispensable elements of policy-making. Besides technological development decision-makers need all-inclusive knowledge of future developments of society, economy and impacts of science and technology. When the worldwide competition is about the attractiveness of innovation systems, such knowledge is important for comparing the innovation performance of nations to other economies. Finland is among the countries improving her position in worldwide performance comparisons since the late 1990s and reached leading nations in early 2000s. This attainment raised national interest and critical debate of the reliability of the data basis and methodologies used in comparisons. In The Finnish Association of Graduate Engineers (TEK) this discussion led to a decision to develop an own comparative exercise together with VTT. In addition to performance analysis based on ex-post indicators the barometer includes the questionnaire of the views and visions of the future development by relevant national actors. The theoretical framework of the barometer is based on the evolution of economies from industrial development phase to sustainable knowledge society. The barometer has been undertaken in 2004, 2005 and 2007, and a wide interest and emerged discussion of barometer proves that a social interest and order exists for the barometer. The article presents the background, methodology and results of technology barometer, discusses its impacts on national discussion, and gives perspectives for the future development of barometer.     

Why zombies can go out: evidence from Chinese manufacturing

Using an original and unique Chinese manufacturing firm-level data over 2002–2005, this article investigates why firms without productivity advantages could invest abroad. Conducting propensity score matching method, we find strong evidence that government financial support is an important reason underlying this outward foreign direct investment phenomenon.     

Modes of innovation in knowledge-intensive business services evidence from Lombardy

The present paper investigates the sectoral variety and common patterns across different typologies of knowledge-intensive business services (KIBS). We examine this issue by considering the case of Lombardy, a highly developed manufacturing area the industrial activities of which are experiencing a pervasive transformation towards higher knowledge content, demanding stronger and more pervasive support by advanced services. Drawing on an original survey-based firm-level dataset, we analyze innovation patterns across KIBS, evaluating the explanatory power of traditional classifications of the service sector, as well as the heterogeneity driven by firm and market specific characteristics. Our findings highlight four profiles of KIBS: interactive innovation mode, product innovation mode, conservative innovation mode and techno-organizational innovation mode. When examining in more depth the variables that are associated with cluster membership, we find that firm strategy is the most significant determinant, with size, customer location, and training also playing a role in defining cluster specificities.

The sources and aims of innovation in services: Variety between and within sectors

Services dominate economic activity, but remain under-researched by analysts of innovation and technological change. The early 'one size fits all' theories of innovation in services have in recent years given way to an appreciation that services are diverse, not least in their innovation activities. This paper draws on recent empirical evidence from large-scale surveys undertaken in 13 western European countries, to investigate the extent and the sources of innovation in five services sectors. The analysis includes the extent to which services innovate, and amongst innovators the extent to which they engage in R&D and collaborative arrangements for innovation. The analysis supports the recent literature which emphasises significant differences between sectors in their pattern of innovation behaviour, but also highlights significant intra-sectoral differences in innovation behaviour. This intra-sectoral variation deserves much fuller investigation in the future.     

The changing role of science in the innovation process: From Queen to Cinderella?

An overview of how the role of science in relation to innovation has been defined over the past five decades is given, showing a change from a linear to a chain-linked model of interpretation. A third analytical grid, leading to a new model is proposed, summarizing the current research on the nature of economically useful knowledge, the diversity of intervening players in learning and the outcomes of innovation. While the chain-linked view surpassed the linear model by emphasising that science is part of the process but not necessarily the initiating step, we need today to explicitly acknowledge the multi-player dimension of innovation and the wider institutional setting where distinct forms of learning take place. The reason is simple: almost all high added value products embody elements of scientific knowledge. But science is only one of a plurality of other sources of knowledge that induce innovation-based growth. More attention should also be given to understanding markets and organisations.     

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.     

The innovation effect of dual-class shares: New evidence from US firms

The proliferation of dual-class structures in the US stock market presents a controversial trend since such shares are traditionally deemed to damage governance quality. We study the relationship between 362 firms with dual-class shares and their innovativeness using patent citations from Google Patents over the 1976 through 2006 period. We find dual-class shares have significant innovation effect in high-tech sectors, hard-to-innovate industries, firms with higher external takeover threat and firms heavily dependent on external equity financing. We also document a positive causality relationship between dual-class structures and the quality of innovation. The channel for this causal relationship is the protection mechanism by which managers can take a long-term view. From a policy perspective, regulators should promote a corporate governance system that protects corporate long-term interest for shareholders.     

Measuring knowledge intensity in manufacturing industries: a new approach

This article presents the methodology and results for measuring the knowledge intensity of manufacturing industries based on the knowledge-related characteristics of their workforce. The measures link information from the Occupational Information Network project (from the US Department of Labor) and the Occupational Employment Statistics (from the Bureau of Labor Statistics) to produce industry-specific knowledge intensity measures. The new measures overcome the main issues posed by the industry-average R&D share in total sales variable, often used as a proxy for knowledge intensity in the literature.