Title:
Complementary
Innovation Strategies and Firm Performance
Abstract: Research and
development policy has become one of the main priorities of European
Union
countries through the Lisbon strategy, aiming at stimulating national
R&D
investments in order to reach the “fatidic” 3% level of GDP. Numerous
studies
have used R&D expenditures as a measure for firms’ innovative
capacity.
While emphasizing innovation inputs and support instruments, these
works
did not take into account complementary innovation strategies such as
marketing
or organizational innovations undertaken by the firm. The theoretical
literature
on innovation highlights nevertheless the feedback character of
innovation
processes where non-technological activities play a crucial role.
Therefore,
the purpose of this paper is to highlight the effects of complementary
innovation
strategies (organizational and marketing innovations) on firms’
technological
innovation (propensity to innovate and innovative performance). We test
our
hypotheses on the sample of the 555 Luxembourg’s firms which responded
to
the 4th Community Innovation Survey (CIS) in 2006.
The results strongly highlight the importance of marketing innovations
as
a complementary innovation activity for both the propensity to innovate
and
the innovative performance. This is in line with the idea that firms
focusing
attention on marketing initiatives are likely to have a better ability
to
increase customer satisfaction in comparison to competitors, to adapt
successfully
to changing market needs, to discover and exploit business ideas and to
access
new information and resources for developing new competitive products
or
processes - which in turn enhance their capacity to innovate. In
contrast,
results show that organizational innovation that firms introduced
enhances
only their propensity to innovate, not their innovative performance.
Another
important result indicates that firms engaging in knowledge management
are
likely to have higher ability to innovate. This tends to indicate that
knowledge
management strategies are associated with more flexibility,
adaptability,
competitive advantage and better organizational performance. The
results
also showed that cooperation with customers has a positive impact on
performance.
This is consistent with previous literature arguing that external
relations
with customers constitute internal organizational competencies that are
crucial
for firms’ performance. Overall, the paper shows that while the
importance
role of R&D expenditures (intramural and/or extramural) in
enhancing
innovative capacity and performance is largely acknowledged, other
complementary
strategies may be also crucial for firms’ competitiveness. The results
offer
some clues for policy-makers in order to favor non-technological
innovations
within the firm.
Authors: Thi Thuc Uyen
Nguyen
and Caroline Mothe