Innovation strategies and firm performance: Simple or complex strategies?

This paper analyzes the effect of various innovation strategies (ISs) of firms on their future performance, captured by labor productivity. Using five waves of the Community Innovation Survey in Sweden, we have traced the innovative behavior of firms over a decade, that is, from 2002 to 2012. We def...

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Bibliographic Details
Published in:Economics of innovation and new technology 2016-01, Vol.25 (7), p.631-650
Main Authors: Tavassoli, Sam, Karlsson, Charlie
Format: Article
Language:English
Subjects:
Community Innovation Survey
complex
Economics and Business
Ekonomi och näringsliv
firm level
firm performance
Innovation strategy
Innovations
panel
Productivity
Samhällsvetenskap
simple
Social Sciences
Technological change
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Summary:This paper analyzes the effect of various innovation strategies (ISs) of firms on their future performance, captured by labor productivity. Using five waves of the Community Innovation Survey in Sweden, we have traced the innovative behavior of firms over a decade, that is, from 2002 to 2012. We defined ISs to be either simple or complex (in various degrees). We call an IS a simple IS when firms engage in only one of the four types of Schumpeterian innovations, that is, product, process, marketing, or organizational, while a complex IS is when firms simultaneously engage in more than one type. The main findings indicate that those firms that choose and afford to have complex ISs are better off in terms of their future productivity in comparison with those firms that choose not to innovative (base group) and also in comparison with those firms that choose simple ISs. The results are mostly robust for those complex innovators that have a higher degree of complexity and also keep the balance between technological (product and process) and non-technological (organizational and marketing) innovations.
ISSN:1043-8599
1476-8364
1476-8364
DOI:10.1080/10438599.2015.1108109