Article thumbnail

Innovation and business performance - a provisional multi-regional analysis

By Stephen Roper, David Smallbone, Ian Vickers, David North and Nola Hewitt-Dundas

Abstract

Although much attention has focussed on the determinants of firms' innovation performance, the relationship between innovation and business performance is less well defined. In this paper we use data from identical plant level surveys conducted in six regions of the UK, Germany and Ireland to examine this relationship and identify some of the implications for regional innovation initiatives. The survey data used was collected by postal survey during 1999 and 2000. In all over 2000 plants responded to the surveys which provide regionally representative information about innovation activity, IT adoption and a number of indicators of business performance. Four main indicators of business performance are examined here: sales and employment growth, export performance, profitability and productivity (value added per employee). The analysis is based on a simultaneous econometric model explaining plants' innovation activity and business performance. Discussion focuses on a number of key themes. First, core-periphery differences are explored by contrasting analytical results for peripheral (Northern Ireland, Scotland) and 'core' regions (Bavaria, Baden-Wurttemberg) within the sample. Second, attention is focussed on the performance effects of firms, different innovation profiles relating to product and process development but also radical and more incremental innovation activity. Thirdly, contrasts between small and larger businesses are considered and the sensitivity of firms, innovation and performance to their operating environment is explored. The paper concludes with an assessment of the implications of the analysis for regional innovation initiatives and their potential impact on business development.

OAI identifier:

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.

Suggested articles

Citations

  1. (1990). A
  2. (1982). An Evolutionary Theory of Economic Change’,
  3. (1992). Do innovating firms outperform non-innovators?’,
  4. (1998). Do Networks Matter for Innovation? The Usefulness of the Economic Network Approach
  5. (1997). Dynamic capabilities and strategic management’,
  6. (1995). Informal boundary-spanning communications in the innovation process: an empirical study’,
  7. (2000). Innovation and E-Commerce: A Cross-Border
  8. (1995). Innovations and R&D in Northern Ireland manufacturing: a Schumpeterian approach’,
  9. (2000). Knowledge Captial and Performance Heterogeneity: A Firm Level Innovation Study', SSE/EFI Working Paper No 387,
  10. (2000). Local Learning from Multinational Plants: Knowledge Transfers in the Supply Chain’, Regional Studies,
  11. (1998). Local Milieu and Innovations: Some Empirical Results’,
  12. (1993). National innovation systems: Britain, in
  13. (2001). On the Relationship Between Innovation and Performance: A Sensitivity Analysis', SSE/EFI Working Paper No 446, Stockholm School of Economics Love,
  14. (1994). Opening the Frontier; Recent Spatial Impacts in the Former Inner-German Border Zone’,
  15. (2001). Patterns of networking in the innovation process: a comparative study of the UK,
  16. (1999). Publicly Funded
  17. (1993). Regional Innovation Policies Compared’,
  18. (1998). Regional Innovation Systems’,
  19. (1997). Regions in a Global Market: The Experiences of Wales and BadenWürttemberg’,
  20. (1998). Research, Innovation and Productivity: An Econometric Analysis at the Firm Level',
  21. (1998). Science and Technology Infrastructure in Baden-Württemberg and Its Orientation towards Future Regional Development',
  22. (1997). Territorial or Trans-territorial Networking: Spatial Aspects of
  23. (1999). The determinants of innovation: R&D, technology transfer and networking effects',
  24. (1993). The profitability of innovating firms’
  25. (1992). The search for R&D spillovers’.