Determinants of innovativeness in SMEs. disentangling core innovation and technology adoption capabilities

This paper studies innovativeness in SMEs from a set of innovation indicators at the firm level, capturing various types of innovation (product, process, organisational, and marketing innovations) and the level of innovativeness in these firm’s developments. The article identifies two separate dimensions in the innovativeness of Spanish SMEs, using factor analysis techniques. One dimension is associated with the capabilities for core/internal innovation and the other with the capabilities for the adoption of technology. The paper shows that significant differences exist in the personal and organisational factors that favour these two dimensions. The entrepreneur’s motivation, business planning, and cooperation in R&D activities constitute significant factors when considering the core dimension of a firm’s innovativeness, but have no effect on the firm’s capabilities for technology adoption. However, the use of external consultancy services seems to have no significant effect on the core dimension of the innovativeness of anSME, whereas it is a relevant factor for its technology adoption. Furthermore, it is shown that the entrepreneur’s education plays a more significant role in the core dimension of a firm’s innovativeness than in its capabilities for technology adoption. Depending on the policy objectives, these differences should lead to the application of specific policy approaches when an attempt to stimulate innovation in SMEs is made

Determinants of Innovative Activity in Newly Founded Knowledge Intensive Business Service Firms

Innovative activity is performed to a considerable extent in the service sector, namely within the socalled knowledge intensive business services (KIBS). Nevertheless, little is known about the determinants of innovative activity in these firms. In the present paper, some of these determinants are examined on the basis of a recently created dataset of 547 newly founded German firms (KIBS Foundation Survey 2003). The results show that the access to knowledge through cooperation and networking is an important factor determining innovative activity in the KIBS sector, whereas, surprisingly, neither managerial characteristics nor spatial proximity have general influence.

Make-or-Buy Decisions in Patent Related Services

Among the most prominent theoretical frameworks dealing with the economic underlyings of firms’ make-or-buy decisions are Transaction Cost Economics (TCE) and the Resourced Based View (RBV). Relying on panel data covering 107 European firms over eight years I test predictions from both TCE and RBV with regard to the outsourcing of patent related services simultaneously. Modelling the share of outsourced patent applications in a Negative Binomial Panel Regression Model I find joint explanatory power of both approaches. My findings support previous literature arguing for an integration of TCE and RBV to a comprehensive theoretical framework of firms make-or-buy decisions

Competitive, but too small - productivity and entry-exit determinants in European business services

The paper investigates whether scale effects, market structure, and regulation determine the poor productivity performance of the European business services industry. We apply parametric and nonparametric methods to estimate the productivity frontier and subsequently explain the distance of firms to the productivity frontier by market characteristics, entry- and exit dynamics and national regulation. The frontier is assessed using detailed industry data panel for 13 EU countries. Our estimates suggest that most scale advantages are exhausted after reaching a size of 20 employees. This scale inefficiency is persistent over time and points to weak competitive selection. Market and regulation characteristics explain the persistence of X-inefficiency (sub-optimal productivity relative to the industry frontier). More entry and exit are favourable for productivity performance, while higher market concentration works out negatively. Regulatory differences also appear to explain part of the business services' productivity performance. In particular regulation-caused exit and labour reallocation costs have significant and large negative impacts on the process of competitive selection and hence on productivity performance. Overall we find that the most efficient scale in business services is close to 20 employees and that scale inefficiencies show a hump-shape pattern with strong potential scale economies for the smallest firms and diseconomies of scale for the largest firms. The smallest firms operate under competitive conditions, but they are too small to be efficient. And since this conclusion holds for about 95 out of every 100 European business services firms, this factor weighs heavily for the overall productivity performance of this industry

Developing science, technology and innovation indicators: what we can learn from the past

The science-technology-innovation system is one that is continuously and rapidly evolving. The dramatic growth over the last twenty years in the use of science, technology and innovation (STI) indicators appears first and foremost the result of a combination between on the one hand the easiness of computerized access to an increasing number of measures of STI and on the other hand the interest in a growing number of public policy and private business circles in such indicators as might be expected in societies which increasingly use organised science and technology to achieve a wide variety of social and economic objectives and in which business competition is increasingly based on innovation. As highlighted on the basis of 40 years of indicators work, frontiers and characteristics that were important last century may well no longer be so relevant today and indeed may even be positively misleading.Technological Change, Science and Technology, Innovation, Statistical Indicators, Measurement of Economic Growth, Policy Making

The Process of Innovation

The paper argues that innovation processes can be cognitive, organisational and/or economic. They happen in conditions of uncertainty and (in the capitalist system) of competition. Three broad, overlapping sub-processes of innovation are identified: the production of knowledge; the transformation of knowledge into products, systems, processes and services; and the continuous matching of the latter to market needs and demands. The paper identifies key trends in each of these areas: (1) increasing specialisation in knowledge production; (2) increasing complexity in physical artefacts, and in the knowledge bases underpinning them; and (3) the difficulties of matching technological opportunities with market needs and organisational practices. Despite advances in scientific theory and information and communication technologies (ICTs), innovation processes remain unpredictable and difficult to manage. They also vary widely according to the firm's sector and size. Only two innovation processes remain generic: co-ordinating and integrating specialised knowledge, and learning in conditions of uncertainty. The paper also touches on the key challenges now facing 'innovation managers' within modern industrial corporations, bearing in mind the highly contingent nature of innovation.innovation processes, specialised knowledge production, knowledge transformation, modern industrial corporations

Managing knowledge in organizations : a Nonaka’s SECI model operationalization

Purpose: The SECI model (Nonaka, 1994) is the best-known conceptual framework for understanding knowledge generation processes in organizations. To date, however, empirical support for this framework has been overlooked. The present study aims to provide an evidence-based groundwork for the SECI model by testing a multidimensional questionnaire Knowledge Management SECI Processes Questionnaire (KMSP-Q) designed to capture the knowledge conversion modes theorized by Nonaka. Methodology: In a twofold study, the SECI model was operationalized via the KMSP-Q. Specifically, Study One tested its eight-dimensional structure through exploratory and confirmatory factorial analyses on 372 employees from different sectors. Study Two examined the construct validity and reliability by replicating the KMSP-Q factor structure in knowledge-intensive contexts (on a sample of 466 health-workers), and by investigating the unique impact of each dimension on some organizational outcomes (i.e., performance, innovativeness, collective efficacy). Findings: The overall findings highlighted that the KMSP-Q is a psychometrically robust questionnaire in terms of both dimensionality and construct validity, the different knowledge generation dimensions being specifically linked to different organizational outcomes. Research/Practical Implications: The KMSP-Q actualizes and provides empirical consistency to the theory underlying the SECI model. Moreover, it allows for the monitoring of an organization’s capability to manage new knowledge and detect the strengths/weaknesses of KM-related policies and programs. Originality/Value: This paper proposes a comprehensive measure of knowledge generation in work contexts, highlighting processes that organizations are likely to promote in order to improve their performance through the management of their knowledge resources

Regional systems of innovation from within.An empirical specification of the relation between technological dynamics and interaction between multiple actors in a Dutch region

technological dynamics; interaction patterns; innovation

Firm-Specific Attributes and MNE Location Choices: Financial and Professional Service FDI To New York And London

In this paper, we sought to extend the theory of the location determinants of MNEs by challenging one of the fundamental assumptions underlying it, namely that location advantages are absolutes whose values are identical for different MNEs. We explicitly acknowledge the relative value of location advantages for individual MNEs and search for the firm-specific attributes affecting this variation. The empirical testing is based on an analysis of 673 financial and professional service MNEs that entered New York and London business clusters via M&As during the last two decades. The findings confirm that the value of particular location advantages varies for MNEs with different attributes, and that it is the interaction between location and firm-specific attributes, rather than each of these independently, that affects location choices. Firms' previous experience in a country, the geographic scope of their acquisition activity, and their size were found to be particularly influential attributes. Classification-JEL: F23, L10, L80, R30Foreign Acquisitions, Location Advantages, Clusters, Global Cities, Financial and professional service industries