Innovation success: What is the role of innovation strategies?

Abstract

The objective of this paper is to explore the role played by firms' strategies during innovation process and its effects on innovation success. We argue that firm's innovative decisions not only concern how much innovation effort to make but, more especially, what kind of innovation objectives to pursue, which refer to strategic decisions taken at the level of the firm. Our econometric analysis is based on a sample of 3,919 manufacturing and services firms taken from the Spanish Technological Innovation Panel (PITEC) for the period 2008–2012. Firstly, applying a principal component analysis we identified a diverse range of innovation strategies (no strategy, unfocused, market, production, cost and environmental and regulatory strategy). Secondly, after controlling positive skewness of the dependent variables a generalized linear model is used to exanimate the impact of these innovation strategies. Our empirical results reveal some relevant aspects. Firstly, firms that do not have a well-defined innovation strategy experience fewer probability of being a successful innovative firm. Secondly, firms that do have an innovation strategy, but not focused on any specific orientation, have enhanced innovation success, but less than that of firms with an oriented strategy. Finally, the results also show that there is a good fit between an oriented strategy pursued by firms and their innovation success. Keywords: innovation objectives, innovation strategy, innovation success, Spain JEL Classification Numbers: D21. O31. O32