No money, no honey? Financial versus knowledge and demand constraints on innovation

The paper adds to the literature on the barriers to innovation in two ways. First, we assess comparatively what mostly constrains firms' ability to translate investment in innovation activity into new products and processes, whether it is mainly finance, as most of the literature would suggest, or whether it is mostly knowledge and market-related aspects. Second, we suggest a method to correct for the sample selection bias that often affects empirical contributions to this scholarship. By filtering out firms that are not interested in innovation from those that struggle to engage in it, we obtain a relevant sample of potential innovators, which allows us to analyse the comparative effect of financial and non-financial barriers on innovation success. We find that demand-side factors, particularly concentrated market structure and lack of demand, are as important as financial constraints in determining firms' innovation failures. This evidence redirects attention from financial to non-financial barriers by considering traditional demand, market structure and regulation factors involved in reduced firm innovation performance. The empirical analysis is based on an unbalanced panel of firm-level data from four waves of the UK Community Innovation Survey (CIS) between 2002 and 2010 merged with data from the UK Business Structure Database. (C) 2017 Elsevier B.V. All rights reserved.

Reviving demand-pull perspectives: The effect of demand uncertainty and stagnancy on R&D strategy

Gabriele Pellegrino

This paper looks at the effects of demand uncertainty and stagnancy on firms' decisions to engage in R&D activities and the amount of financial effort devoted to these. The paper provides a number of contributions to the innovation literature: first, it adds to the revived debate on demand-pull perspectives in innovation studies by examining demand-related (lack of) incentives to invest in innovation. Second, it complements the literature on barriers to innovation by focusing on demand-related obstacles rather than the more frequently explored financial barriers. Third, it analyses whether experiencing demand barriers is a sector-specific feature. Firms active in high-or low-tech manufacturing or in knowledge-intensive or low-tech services might be more or less dependent on demand conditions when deciding to perform R&D. We find that uncertain demand and lack of demand are perceived as two quite distinct barriers. While the perception of a lack of demand has a marked negative impact not only on the amount of investment in R&D but also the likelihood of firms to engage in R&D activities, demand uncertainty seems, on the contrary, to represent an incentive to spend more in R&D, although only in low-tech sectors. We interpret this evidence in terms of the specific phase of the innovation cycle in which decisions to invest in R&D are taken. Sectoral affiliation seems to be playing a role only for demand uncertainty, supporting the conjecture that positive expectations on the presence of adequate market demand are a necessary condition to invest in R&D.

Oxford University Press2017

Open innovation in SMEs: Trends, motives and management challenges

Vareska van de Vrande

Open innovation has so far been studied mainly in high-tech, Multinational enterprises. This exploratory paper investigates if open innovation practices are also applied by small- and medium-sized enterprises (SMEs). Drawing oil I database collected from 605 innovative SMEs in the Netherlands, we explore the incidence of and apparent trend towards open innovation. The survey furthermore focuses oil the motives and perceived challenges when SMEs adopt open innovation practices. Within the survey, open innovation is measured with eight innovation practices reflecting technology exploration and exploitation in SMEs. We find that the responding SMEs engage in many open innovation practices and have increasingly adopted such practices during the past 7 years. In addition. we find no major differences between manufacturing and services industries, but medium-sized firms are oil average more heavily involved in open innovation than their smaller counterparts. We furthermore find that SMEs Pursue open innovation primarily for market-related motives such as meeting customer demands, or keeping LIP with competitors. Their most important challenges relate to organizational and Cultural issues as a consequence of dealing with increased external contacts. (C) 2008 Elsevier Ltd. All rights reserved.

Elsevier2009

What makes companies pursue an Open Science strategy?

Julio Diego Salvador Raffo, Markus Simeth

Whereas recent scholarly research has provided many insights about universities engaging in commercial activities, there is still little empirical evidence regarding the opposite phenomenon of companies disseminating scientific knowledge. Our paper aims to fill this gap and explores the motivations of firms that disclose research outcomes in a scientific format. Besides considering a dimension internal to the firm, we focus particularly on knowledge sourcing from academic institutions and the appropriability regime. We conduct an econometric analysis with firm-level data from the fourth edition of the French innovation survey (CIS) and matched scientific publications for a sample of 2512 R&D performing firms from all manufacturing sectors. This analysis provides evidence that firms are more likely to adopt academic principles if they need to access scientific knowledge that is considered important for their innovation development, whereas the mere existence of collaborative links with academic institutions is not a strong determinant. Furthermore, the results suggest that the inclination of firms to publish is sensitive to the level of knowledge spillovers in a sector and the effectiveness of legal appropriation instruments. (C) 2013 Elsevier B.V. All rights reserved.

Elsevier Science Bv2013