27 research outputs found
Do resource constraints trigger or hamper innovation?:a longitudinal study of UK high-tech firms
This paper explores whether firms resource constraints trigger or hamper innovation using a ten-year longitudinal study. It contributes to the longstanding theoretical debate between the resource-based and entrepreneurship views of the firm. Scholars from the resource-based perspective argue that resource constraints increase delays and unpredictable results, which thereby to impede innovation. Entrepreneurship research however suggests that organizations avoid experimentation if resources are available, and that resource scarcity therefore stimulates managers to adopt entrepreneurial practices that foster innovation. This points to our imperfect understanding on the issue.This paper contributes to both theoretical advance and managerial practice. First, to correct the bias from a disproportionate amount of interest to financial barriers, we provide a more balanced and integrated view by considering other important resource constraints. Second, to observe the difference of two types of innovation, we augment the literature by studying the effects of resource constraints on both incremental and radical innovativeness and on firmsâ performance of sales and R&D growth. Finally, the issue of resource constraints is an inevitable challenge, and the findings of the paper provide some guidance to managers and innovators who are struggling with the lack of resources on one hand and with the pressure of innovation and competitiveness on the other hand. This paper is unique in presenting a long-term, longitudinal analysis of the impact of resource constraints on innovation, both radical and incremental. It presents a ten-year longitudinal study following 362 firms through the life cycle. We use panel analysis techniques to observe the impact of resource constraints on subsequent innovative performance. A research framework is derived from the literature review. We examine the knowledge shortfalls of: management; market; sales; production; R&D and finance. This analysis is based upon a unique, longitudinal panel dataset of 241 UK and German firms in six technology-based sectors over ten years. The dataset draws upon performance data as well as the results of detailed managerial surveys that were carried out in the UK and Germany. This, combined with information provided by interviewees about the firmsâ characteristics upon founding, provides a unique and rich longitudinal perspective on factors contributing to the long-run performance of these firms. This study is based on two surveys that were carried out in 1997 and again in 2003. Using these databases, all firms with at least three employees in 1997 that were operating in one or more high-tech sectors and having been founded as legally independent companies between 1987 and 1996 were selected; the mean year of founding was 1991. Our approach to the problem involves initial use of panel logit models to predict the likelihood of a firm engaging in incremental or radical innovation. Our model is specified in a manner that we consider the lagged effect of the resource constraints in t0 on propensity for innovation in period t1. Our other controls listed above all are used for period t1. Given challenges in interpreting logit models we present the results in the form of marginal effects. Following from this analysis we then use panel OLS models to explore the impact of these constraints on subsequent innovation and growth performance. Does the lack of knowledge hamper or trigger innovation? The answer is rather mixed. While our study indicates that the lack of knowledge may not hamper innovation development for both incremental and radical, it suggests that the lack of knowledge does matter when considering sales growth and R&D growth.For radical innovation, our study suggests that the lack of management knowledge may trigger sales growth. Un-surprized, the lack of R&D knowledge triggers R&D growth of firms. This may be explained in two ways. First, the lack of R&D knowledge leads firm to increase R&D investment. Furthermore, the nature of radical innovation may also lead the innovative firms to discard prior R&D knowledge in order to build up new R&D knowledge. Finally, our study echoes the extant literature that the lack of financial knowledge hampers the R&D growth.For incremental innovation, our study once again stresses the significant impact of the lack of financial knowledge on innovation and suggests that the shortfall of financial knowledge hampers sales growth. It further suggests that the lack of market knowledge hampers R&D growth. This result also suggests that market knowledge is critical for firms in deciding their R&D investment. Finally, our study suggests that the lack of production knowledge triggers R&D growth. Managers tend to increase R&D investment when they need production knowledge.Through a ten-year longitudinal study, our study contributes to the existing literature by advancing the understanding of the association between resources constraints and innovation. Building on the theories of human capital, entrepreneurship and RBV, we shed light about the impact of knowledge shortfalls on both radical and incremental innovation. Finally, our study helps to explain the disputes of whether resource constraints hamper or trigger innovation. The study also has implications for executives and managers. It demonstrates that managers can harness the entrepreneurship practices by minimizing their interference for radical innovativeness. Managers and innovators hare encouraged to update their market knowledge that serves an important indicator for R&D investment. Furthermore, as suggested by many researchers, financial knowledge is always important in operating and managing innovation for both sales and R&D growth. Indeed, innovative firms face problems and more innovative firms have more problems. The issue of resources constrains is not only critical but also difficult to deal with. We hope our paper inspires researchers to conduct further research in the future
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Skills combinations and firm performance
Creative skills, STEM(science, technology, engineering and mathematics) skills and management skills have all been positively associated with firm performance as well as regional growth. But do firms that combine these types of skills in their workforce grow more quickly than those that do not? We compare the impact of STEM, creative and management skills on their own, and in various combinations, on turnover growth. We use a longitudinal dataset of UK firms over the period 2008â2014 with lagged turnover data to explore whether the combination of skills used by a firm impacts its future turnover growth. Using fixed-effect panel and pooled OLS models, we find that the performance benefits associated with both STEM and creative skills materialize when they are combined with each other or with management skills rather than when they are deployed on their own
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The fusion effect: the economic returns to combining arts and science skills
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The Spread of Retracted Research into Policy Literature
Retractions warn users against relying on problematic evidence. Until recently, it has not been possible to systematically examine the influence of retracted research on policy literature. Here, we use three databases to measure the extent of the phenomenon, and explore what it might tell us about the users of such evidence. We identify policy relevant documents that cite retracted research, we review and categorise the nature of citations, and we interview policy document authors. Overall, we find 2.3% of retracted research is policy cited. This seems higher than one might have expected, similar even to some notable benchmarks for ânormalâ non-retracted research that is policy-cited. The phenomenon is also multifaceted. Firstly, certain types of retracted research (those with errors, types 1 and 4) are more likely to be policy-cited than other types (those without errors, types 2 and 3). Secondly, although some policy relevant documents cite retracted research negatively, positive citations are twice as common and frequently occur after retraction. Thirdly, certain types of policy organisations appear better at identifying problematic research, and are perhaps more discerning when selecting and evaluating research
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How can policy makers help rural creative businesses contribute to Levelling Up?
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Starving the golden goose? Access to finance for innovators in the creative industries
This paper extends research on innovating firmsâ access to finance in the creative industries. While we know that entrepreneurial firms experience barriers to applying for funding and difficulties in securing positive outcomes, prior studies have shown that firms may use patents to signal innovative quality to potential investors. Yet these studies typically focus on R&D-oriented innovation in âtraditionalâ technological sectors. Creative industries firms have different innovation characteristics that may influence the funding process, including the uncertainty of content-based product markets, the highly-imbalanced information asymmetries between creative entrepreneurs and conservative investors, and the symbolic and intangible nature of their innovations. Using the UKâs Creative Industries Councilâs unique cross-sectional survey data of 575 firms we analyse the extent to which innovating firms seek to apply to and achieve funding from a wide range of potential sources. We find little evidence that prior innovative activities provide a meaningful signal, positive or negative, to potential funders for creative industries firms. This suggests that the highly intangible and symbolic nature of innovation in creative industries businesses is unreliable as an indicator of quality. The reliance of owners on personal capital is congruent with recent literature on the high levels of social and personal capital among workers in the creative industries. We suggest that the specific challenges creative firms face may be addressed through new financial and policy instruments to feed and sustain these high-growth, innovating industries
From funding gaps to thin markets: UK Government support for early-stage venture capital
Research report'Hybrid' venture capital schemes backed by both private and public sector funding play an increasingly important role in the risk capital funding of early-stage firms with the potential for significant growth.
We analysed the impact of investment from six UK government-backed venture capital schemes on 782 funded firms over the period 1995-2008.
The six schemes that are the focus of this analysis are the Enterprise Capital Funds (ECFs), Early Growth Funds (EGFs), Regional Venture Capital Funds (RVCFs), Scottish Enterprise-backed Funds, University Challenge Funds (UCFs), and Welsh Hybrid Funds
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Determinants of rural creative microclustering: Evidence from webâscraped data for England
This study aims to compare the drivers of clustering of rural and urban creative industries in England, UK. We use preâpandemic webâscraped data from 154,618 creative industry organisations in England, and use a novel technique to identify 71 distinct rural creative âmicroclustersâ of geographically proximate creative firms. We then consider the role of placeâbased assets and agglomeration in the presence of microclusters at a microâlevel geography and find that the determinants of microclustering are generally consistent between rural and urban areas. On that basis we argue that policies to support creative clusters may drive rural regional development
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Creative Radar 2021: the impact of COVID-19 on the UK's creative industries
This report provides new evidence on the impact of the COVID-19 pandemic on businesses in the creative industries. Following on from the Creative Radar survey data, which collected responses from 976 firms in January-March 2020 just before the first lockdown, we interviewed 417 companies that consented to be re-contacted to understand how they had been impacted by the pandemic in April and May 2021. Our key findings are: ⢠Only 4 per cent of the 675 companies we were able to contact had definitely closed or appeared to be no longer trading. The companies in our sample appear to have survived the crisis by furloughing employees and reducing the number of freelancers they worked with.
â˘The impact of the pandemic was very uneven. The Music & performing arts, Film & TV and Publishing businesses in our sample were particularly affected, in line with recent DCMS estimates. But some businesses thrived, with 18 per cent of businesses hiring more employees during the pandemic. These thriving companies were found across all creative sub-sectors.
â˘At the firm level we see that far from becoming redundant, freelancers have become even more vital to businesses that had been making greater use of them prior to the pandemic. Freelancers were important for those businesses that introduced new products as a result of the pandemic.
â˘At the firm level we did not see substantial regional and national differences in the impact of pandemic. The impacts of the pandemic appeared to be relatively evenly spread across the UK.
â˘Businesses in the UKâs creative clusters saw reduced turnover outside their immediate regions (from the rest of the UK and from overseas) but local and regional business appeared to keep them operating.
â˘The creative microclusters that are located outside of the major creative clusters, were more likely to have added new employees. In the past year they increased their sales to the rest of UK, rather than focusing only on local markets.
â˘Companies across the UK kept investing in their businesses through the pandemic, with 66 per cent of businesses increasing investments in R&D, design, marketing, training or IT. Companies in microclusters were more likely to have increased investment in R&D.
â˘More than 25 per cent of the companies in our sample changed or downsized office space during the pandemic. Companies in London were particularly likely to have downsized.
â˘The companies in our sample have substantial investment needs, with 78 per cent requiring further investment but 45 per cent of those not having the resources for those to invest. In particular, companies wanting to invest in R&D and design are more likely to export but also more likely to view access to finance as a barrier to growth
What factors of early-stage innovative projects are likely to drive projectsâ success? A longitudinal analysis of Korean entrepreneurial firms
Previous studies have identified the factors affecting successful technology commercialization as outcomes of R&D projects. However, most of them have used crossâsectional data, whereas there is a dearth of literature using longitudinal data analysis. Longitudinal analysis is essential for investigating the characteristics of earlyâstage innovative projects due to the inherent time lag between project evaluation and commercialization. Therefore, this study examines the earlyâstage project characteristics that can be used as meaningful evaluation criteria for predicting success, particularly in technology commercialization. We collected data on the exâante evaluation results and exâpost commercialization results of R&D projects pursued by entrepreneurial firms. We then conducted a logistic regression analysis and identified three marketârelated factors as significant in driving technology commercialization success in the early stages of technology development: market potential, commercialization plan, and market condition