Small firms and patenting revisited

In order to observe a patent application at the firm level two conditions need to be met: new products need to be of patentable quality, which depends both on the degree of novelty of innovations and on the total number (portfolio) of innovations; and the benefits of patents need to be higher than the costs of owning them. Analyzing the patent propensity of small and large UK firms using a novel innovation-level survey (the SIPU survey) linked to Community Innovation Survey data we find that when we consider the whole innovation portfolio smaller firms do patent less than larger firms. However, using data on individual innovations, we find that smaller firms are no less likely to patent any specific innovation than larger firms. We argue that size differences in the probability to patent relate primarily to the ‘portfolio effect’, i.e. larger firms generate more innovations than smaller firms and therefore are more likely to create one or more which are patentable. As for the decision to patent a patentable innovation, we find that cost barriers, more than issues of innovation quality or enforceability, deter small firms from patenting specific innovations. Measures to address the costs of patenting for smaller firms – perhaps by considering patents as eligible costs for R&D tax credits – and/or subsidizing SMEs’ participation in IP litigation schemes may both encourage patent use by smaller firms

Customer oriented, but losing sight of the big picture: how lack of outside validation can limit market information processing in really new product development projects

Product development (PD) teams enhance their change of success when they process rich and diverse market information in the course of a product innovation trajectory. A large body of literature has advocated that including this information, such as insights on developments in market segments and customer needs regarding product applications, in new product decision-making is critical for new product performance. Contrary to earlier findings this is not only the case for incremental PD but also for their really new counterpart. Additionally, research has focused on within PD team practices that allow firms to be market oriented innovators, hereby focusing on cross-functional integration, project priority setting, and using appropriate market research tools. However, the practice of innovation is complex. PD teams have to spread attention and processing market information can easily be overlooked. Against this backdrop we present a comparative longitudinal case-study which provides detailed insights of two new product trajectories, Shield and Anti-resist, in one chemical firm, ChemCo. We illustrate what market information was processed over the course of the two innovation processes. We find that project members in Anti-resist processed a larger variety of market information when compared to the ones in Shield, especially in the early phases of the project. In due course this led to the Anti-resist team being able of introducing the product into the market while Shield was put on hold. Lack of market information processing in Shield was not due to within PD team factors which have been a focus point of previous literature. Project members in Shield, in comparison to the ones in Anti-resist, were less proactive in validating their market information processing practices with the wider organizational context ‘outside’ the PD team in the course of the innovation trajectory by means of using an established organizational PD protocol and interacting with ChemCo’s senior management. While marketing literature has praised decentralization for enhancing market information processing, our main contribution to the literature on market oriented PD is that this comes with the responsibility of individual PD teams to proactively validate their own marketing actions along the way

Theory-testing using case studies - A comment on Johnston, Leach, and Liu

In a recent issue of Industrial Marketing Management, Johnston, Leach, and Liu made a strong case for the use of case studies. Although they convincingly argued that researchers should follow a rigorous and systematic approach in conducting case studies, they failed to address the most important criticism of case studies, i.e., their alleged lack of generalizability. In this reaction to their article, the extent and nature of case studies' generalizability in theory-testing is discussed. For this purpose, the concept of theoretical generalization is presented and defined, and it is argued that in publishing the findings of their case studies, researchers need to demonstrate the existence of causal relationships along with their results. (C) 2001 Elsevier Science Inc. All rights reserved