The effect of local and global linkages on the innovativeness in ICT SMEs: does location-specific context matter?

Abstract

Countries differ significantly with regard to the location-specific contexts in which they are embedded. The aim of this paper is to extend the discussion on the effects of local and global innovation collaborations on the degree of novelty of innovation by considering this context. Our main question is: Does embeddedness in the developed or emerging country context affect the likelihood of benefiting from local or global linkages for innovations with higher novelty?

The paper is based on data gathered through a survey of firms in the ICT sector in an emerging economy (India) context and from two Scandinavian countries (Sweden and Norway). The findings of this study show that global linkages do indeed impact the degree of novelty of innovation. However, country context does have a moderating effect. While the effect of global linkages is highly positive on the innovativeness of Scandinavian firms, for the Indian SMEs, the linkages that give novel innovations are the regional ones.

Keywords:

• external sources
• regional linkages
• global linkages
• SME
• ICT
• degree of novelty
• Scandinavia
• India

Notes

1. 26.30 Manufacture of communication equipment, 62.01 Computer programming activities, 62.02 Computer consultancy activities, 62.03 Computer facilities management activities and 62.09 Other information technology and computer service activities.

2. The sub-categories of global includes: South America, Central & Eastern Europe, Africa, rest of Asia, North America, Japan & Australasia, and Western Europe.

3. This research aimed at exploring factors affecting the novelty of innovation and not merely introducing innovations or not. Therefore firms with novel innovations (new to the world or new to the industry) are compared with firms that have introduced only new to the firm innovations. Furthermore, this is also related to the lack of survey data on non-innovative firms.

4. The models are not presented but can be provided upon request.

5. As our “global” variable includes both market as well as institutions related collaborators there might be concerns whether there also exists a different pattern in terms of local or global collaborators. While we have taken this into account in our 3rd model, Models 4 & 5 include global collaborators in general. However, by distinguishing between market and institutions our results stay the same for market related factors and we cannot observe any significant differences in the institution variables.