Varieties of innovation and business survival: Does pursuit of incremental or far-ranging innovation make manufacturing establishments more resilient?

The transition from an industrial economy to an innovation economy poses two critical questions for the manufacturing sector in advanced countries. First, given the diffusion of modern manufacturing practices around the world, what level of innovation (incremental, more far-ranging, or radical) is most likely to support a resilient domestic manufacturing sector? Second, are assumed differences in the innovative capacity across space likely to hasten the decline of rural manufacturing? To answer these questions this research combines comprehensive measures of self-reported innovation able to reliably differentiate incremental and more far-ranging innovation with establishment-level data able to examine the geographical distribution of these different innovation strategies. The data used for the analysis includes a two-period panel of manufacturing establishments surveyed in 1996 and 2013 with annual employment data indicating survival in the intervening years. Our findings suggest that long-surviving manufacturing plants overwhelmingly gravitate away from non-innovation strategies toward incremental or more far-ranging innovation orientations. A survival advantage of far-ranging innovation over incremental innovation is observed for standalone firms. We do not identify a difference in the innovation orientations of rural and urban manufacturing establishments.     

How open is innovation?

This paper is motivated by a desire to clarify the definition of ‘openness’ as currently used in the literature on open innovation, and to re-conceptualize the idea for future research on the topic. We combine bibliographic analysis of all papers on the topic published in Thomson's ISI Web of Knowledge (ISI) with a systematic content analysis of the field to develop a deeper understanding of earlier work. Our review indicates two inbound processes: sourcing and acquiring, and two outbound processes, revealing and selling. We analyze the advantages and disadvantages of these different forms of openness. The paper concludes with implications for theory and practice, charting several promising areas for future research.     

Does a different view create something new? The effect of employee diversity on innovation

A growing literature is analysing the relation between diversity in the knowledge base and the performance of firms; nevertheless, studies that investigate the impact of employee diversity on innovation are scarce. Innovation is an interactive process that often involves communication and interaction among employees in a firm and draws on their different qualities from all levels of the organisation. This paper investigates the relation between employee diversity and innovation in terms of gender, age, ethnicity, and education. The analyses draw on data from a recent innovation survey. This data is merged with a linked employer-employee dataset that allow us to identify the employee composition of each firm. We test the hypothesis that employee diversity is associated with better innovative performance. The econometric analysis reveals a positive relation between diversity in education and gender on the likelihood of introducing an innovation. Furthermore, we find a negative effect of age diversity and no significant effect of ethnicity on the firm's likelihood to innovate. In addition, the logistic regression reveals a positive relationship between an open culture towards diversity and innovative performance. We find no support of any curvilinear relation between diversity and innovation.     

Internal innovation or external innovation? An organizational context-based analysis in China

The purpose of this paper is to explore how enterprises choose innovation pattern from the perspective of internal organization context. This article distinguishes between internal innovation and external innovation, such that human capital and information structure are the core factors affecting firm's choice decision for internal or external innovation. Based on a survey in China, this study analyzes the relationships among specific human capital, information structure and innovation pattern. Further we also examine the moderating effect of cooperative motivation including R&D motivation, technical learning motivation and strategy motivation. The results suggest that with the degree of specific human capital increase, enterprises tend to choose internal innovation pattern and with the information structure more dispersed/horizontal, enterprises more tend to choose internal innovation pattern. What's more, motives related to research and development, and technology learning are two relatively significant moderators in the relationships among specific human capital, information structure and innovation pattern.     

How do innovation systems interact? Schumpeterian innovation in seven Australian sectors

This paper analyses how and why different types of innovation systems interact through analysing seven Australian sectors. We find that there are sets of mechanisms or systems that ‘articulate’; i.e. structure and shape the interaction among sectoral innovation systems and other types of innovation systems. Drawing on the Schumpeterian and evolutionary legacy, we contribute a theoretical explanation of how interaction among innovation systems influences innovation. First, this interaction enables and enhances variety creation by expanding the new combinations of knowledge and resources a firm can achieve. Second, it allows for more efficient and effective scaling up of useful knowledge recombination to achieve increasing returns. Empirically, this is supported in that the more successful sectors have active articulation systems with alignment with other systems, while weaker sectors have unplanned and patchy linkages. No simple model seems to explain successful articulation. However, important factors are active receptor firms with the motivation and capabilities to absorb and use resources from external systems, high quality and responsive education systems, and international linkages. Public research, labour markets, and intermediaries varied in importance.     

Connecting others: Does a tertius iungens orientation shape the relationship between research networks and innovation?

Research on social networks and innovation emphasizes that individuals spanning structural holes and crossing institutional boundaries have more opportunities for knowledge recombination and innovation involvement. However, transforming the potential knowledge and resources available through personal networks to attain innovation can be difficult for the focal individual. Using an ego-network approach, this study examines whether and to what extent an individual strategic orientation to cooperation (i.e. tertius iungens) contributes to strengthening the relation between two personal network properties (structural and institutional separation) and involvement in innovation. Our analysis is conducted in the context of biomedicine, where research networks are particularly relevant for science and innovation achievements. Our findings advance social network theory by decoupling social network mechanisms from individual strategic networking behavior as factors influencing knowledge generation processes. Results also provide original evidence on an overlooked phenomenon: the moderating role of a tertius iungens orientation in the relationship between multiple social network properties and innovation. Finally, our research sheds new light on the distinct sources of knowledge recombination in networks and the role of individual networking strategies to facilitate mobilization of resources for innovation.     

Do innovation measures actually measure innovation? Obliteration,symbolic adoption,and other finicky challenges in tracking innovation diffusion

Although innovation diffusion is a central topic in policy and strategy, its measurement remains difficult – particularly in cases where the innovation is a complex and possibly ambiguous practice. In this paper, we develop four theoretical mechanisms that may bias diffusion markers by leading to the understatement and/or overstatement of diffusion at different points in time. Employing the case of “green chemistry,” we then compare three different diffusion markers – keywords, database index terms, and domain expert assessments – and we demonstrate how they lead to differing conclusions about the magnitude and timing of diffusion, organizational demography, publication outlets, and collaboration. We also provide suggestive evidence of extensive “greenwashing” by particular organization types and in particular countries. Building on these findings, we point to potential challenges with existing diffusion studies, and we make a case for the incorporation of practitioners in construct measurement and for the integration of comparative metrics in diffusion studies.     

Does combining different types of collaboration always benefit firms? Collaboration,complementarity and product innovation in Norway

Product innovation is widely thought to benefit from collaboration with both scientific and supply-chain partners. The combination of exploration and exploitation capacity, and of scientific and experience-based knowledge, are expected to yield multiplicative effects. However, the assumption that scientific and supply-chain collaboration are complementary and reinforce firm-level innovation has not been examined empirically. This paper tests this assumption on an unbalanced panel sample of 8337 firm observations in Norway, covering the period 2006–2010. The results of the econometric analysis go against the orthodoxy. They show that Norwegian firms do not benefit from doing “more of all” on their road to innovation. While individually both scientific and supply-chain collaboration improve the chances of firm-level innovation, there is a significant negative interaction between them. This implies that scientific and supply-chain collaboration, in contrast to what has been often highlighted, are substitutes rather than complements. The results are robust to the introduction of different controls and hold for all tested innovation outcomes: product innovation, new-to-market product innovation, and share of turnover from new products.     

Exploring IT-enabled innovation: A new paradigm?

Innovation is a major strategic issue for many organizations. This paper reports on findings from 10 case studies of successful IT-enabled innovation covering a wide range of organizations and projects. They were carried out as an exploratory study to identify practices that contribute to innovation and specifically consider the implications of a focus on innovation for earlier work on benefits-led approaches to IT.     

How does late-career entrepreneurship relate to innovation?

In this paper, we present an explorative study that develops our understanding of the relationship between late-career entrepreneurship and innovation-driven business activity. Based on observations of 2903 solo founders of new ventures in Germany in 2008–2017, we offer first and robust evidence that late-career entrepreneurs (~50 years and above) are more likely than younger founders to introduce product/service innovations that are ‘new to the market’. Our explorations specifically reveal that older founders who draw on personal financial resources and combine their innovation orientation with prior managerial experience are most likely to generate the types of innovations that bring new products or services to the market. We conclude by discussing how our study's insights contribute to the research agenda on innovations in late-career entrepreneurship.     

Does history count?

The Census of Marine Life is an international and inter-disciplinary collaboration that seeks to map ocean life of the past, present and future. From the Arctic to the abyssal zones, it is producing a stream of newsworthy science, literally pushing the study of biodiversity to new depths. This fascinating and far-reaching endeavour offers a rich set of insights that can illuminate our changing ideas about the oceans. But one section of the Census deserves special attention--the History of Marine Animal Populations. It provides a unique focus for debates about collaboration and big science, about historical methods and about the study of current science by historians of science.     

What hampers innovation? Revealed barriers versus deterring barriers

Innovating firms are likely to face several challenges and experience different types of barriers. In this paper we argue that it is necessary to distinguish between two kinds of barriers to innovation. The first corresponds to what we describe as revealed barriers and reflects the degree of difficulty of the innovation process and the learning experience consequent on the firm engaging in innovation activity. The second type of impediment, which we label deterring barriers, encompasses the obstacles that prevent firms from committing to innovation. We use data from the 4th UK Community Innovation Survey (CIS4) to investigate the relationship between firms’ engagement in innovation and their assessment of the barriers to innovation. We show that the relationship is curvilinear in the case of costs and market barriers. These results have important implications for innovation policy and innovation management.     

Do mandatory pension contributions hinder innovation? Empirical evidence

This paper empirically investigates the effect of mandatory pension contributions on firm innovation. We find that firms with mandatory contributions experience a decline in their innovation output. This effect is stronger for firms with financial constraints, more short-term institutional investors, higher levels of managerial short-termism. We also document that mandatory pension contributions result in a reduction in firm research and development expenditures and an increase in firm debt-to-asset ratio. Moreover, we report that firms with mandatory contributions increase their alliance activities to pursue innovation with external partners.     

Can direct innovation subsidies relax SMEs’ financial constraints?

Financial constraints hamper the ability of small and medium-sized enterprises (SMEs) to undertake innovative activities, which, in turn, affects countries’ long-term growth. Therefore, promoting access to external funding for SMEs represents an important challenge for policymakers. This paper investigates whether innovation subsidies, provided by France's public investment bank to French SMEs, have translated into better access to both debt and equity financing by means of a certification effect. We exploit a unique database that collates the innovation subsidies received by French firms over the 2000-2014 period to construct a quasi-natural experiment and evaluate the causal impact of these subsidies on financial constraints for SMEs. We find a significant improvement in access to bank financing for subsidized firms, but the effect is heterogeneous and mainly concentrated on micro and small firms that have been operating for around six years. In contrast, we do not find any significant improvement in access to equity financing. We demonstrate that this last result is partly explained by a substitution effect between bank debt and equity financing.     

Users as innovators? Exploring the limitations of user-driven innovation

Considering users as innovators has gained considerable support over the past 30 years. Eric von Hippel’s work in this area forms a significant part of the theoretical underpinning and evidence behind this concept. Many further studies have been undertaken to support it. It has contributed to our understanding of innovation management in general and new product development in particular. Even so, Lüthje and Herstatt emphasise that empirical findings are scarce and that the most radical innovations of the last 35 years were not developed by users. Thus, in this paper we critically review the lead-user theory and focus on three specific areas of weakness of the lead-user concept (conceptual, methodological, empirical), and argue that improvement in these areas would considerably strengthen its standing. We conclude that although lead users can contribute to the innovation process, this contribution should not be overstated, and that insufficient attention has been paid to the limitations of this theory.     

Can behavioural biases in choice under novelty explain innovation failures?

This paper proposes a new framework of ‘behavioural innovation economics’ as a synthesis of behavioural economics and innovation economics in the context of choice under novelty. The standard heuristics and biases framework of behavioural economics is applied to map and analyze systematic choice failures in the innovation process by distinguishing between choice under uncertainty and choice under novelty. Behavioural biases that affect choice under novelty are then elaborated. The paper then suggests 10 ways in which choice under novelty is behaviourally hard, rendering innovation subject to characteristic failure along these behavioural dimensions.     

Closed or open innovation? Problem solving and the governance choice

Scholars have recently highlighted the promise of open innovation. In this paper, we treat open innovation—in it's different forms and manifestations—as well as internal or closed innovation, as unique governance forms with different benefits and costs. We discuss how each governance form, whether open or closed, is composed of a set of instruments that access (a) different types of communication channels for knowledge sharing, (b) different types of incentives, and (c) different types of property rights for appropriating value from innovation. We focus on the innovation “problem” as the central unit of analysis, arguing for a match between problem types and governance forms, which vary from open to closed and which support alternative forms of solution search. In all, the goal of this paper is to provide a comparative framework for managing innovation, where we delineate and discuss four categories of open innovation governance forms (markets, partnerships, contests and tournaments and user or community innovation) and compare them with each other and with two internal or closed forms of innovation governance (authority and consensus-based hierarchy).     

International research collaboration: An emerging domain of innovation studies?

International research collaboration (IRC) has been increasingly important as an emerging area of innovation studies. This study reviews the intellectual base, main research trajectories and intellectual communities of the IRC research domain over the period 1957–2015. It integrates qualitative review and three quantitative analyses including co-citation network analysis, main path analysis and bibliographic coupling analysis. The results show that the IRC research has gone through three phases, namely, “emergence” (1957–1991), “fermentation” (1992–2005) and “take-off” (2006–2015) phases. The co-citation network analysis confirms that the IRC research field has been developed under the influence of two pioneering studies related to bibliometrics research. The main research trajectories in IRC studies over the three development phases and over the whole period are identified based on the main path analysis, which shows that co-authorship analysis is the main research method in IRC studies. A bibliographic coupling analysis suggests that the whole IRC research domain can be classified into five distinct intellectual areas: drivers of IRC, IRC patterns, IRC effects, IRC networks and IRC measurement. Seven topics for future research are also identified.     

Ambidexterity lost? Compromising innovation and the exploration/exploitation plan

Although innovation is central to a firm's success and a top priority for most technology managers, firms commonly report disappointment that innovation outcomes do not match their original plans. This paper examines the difference in intended innovation and realized innovation using an exploration/exploitation framing. Its focus is on changes to defined innovation plans that occur after planning phases end. Extant literature and field research form the basis for hypotheses that are then tested using a large scale survey of an entire population of small and medium-sized high-technology enterprises (SMEs).Findings of compromised exploration in favor of exploitation, during the development phase, is quantified. Firms divert resources away from novel emergent exploration and into existing product development, thereby undercutting innovation plans. Intended innovation, established during the planning stages, is found to be compromised.Our hypotheses, that agency and resource dependence underpin a shifting between explorative and exploitative development, have support. The paper's theoretical contributions include the application of novel agency and resource dependence perspectives onto innovation. It informs ambidexterity research by indicating where, how much, and why erosion in the balance of exploration/exploitation occurs and provides new avenues for research into low innovation outcomes.