Hidden innovators: the role of non-R&D activities

Abstract

Although R&D has been highlighted as the main source of firm-level innovations, a significant group of firms develop innovations without performing R&D activities. The primary goal of this study is to understand the sources of innovation in such firms. To accomplish this goal, we explore the role played by other, non-R&D activities that can lead to innovation – activities such as technology forecasting, design, use of advanced manufacturing technologies and training. Our empirical analysis is based on a representative panel of Spanish manufacturing firms. The results strongly support the view that non-R&D activities are critical factors in explaining both product and process innovations attained by any firm, especially in the case of firms not performing R&D. Academic, managerial, and policy implications are derived from these results.

Keywords:

• non-R&D performers
• technological forecasting
• design
• advanced manufacturing technology
• training

Acknowledgements

We thank the Editor and the two anonymous reviewers for their valuable insights and helpful comments on previous versions of this paper. This study has been partially supported by financial aid from the Spanish Ministry of Education and Science, with the Projects ECO2008-01513 and SEJ2007-67582.

Notes

The following web link shows papers published using the SBSS survey: http://www.funep.es/esee/esee_articulos.asp.

Results without R&D intensity will also be provided.

A rough estimation of these figures in the whole population of Spanish manufacturing firms, according to the sampling criteria of the SBSS, suggest that approximately 36% of product innovators and 50% of process innovators are non-R&D performers.

In fact, additional regressions (available from the authors upon request) show that the R&D intensity coefficient increases from 4.10 to 5.77 (with p value < 0.01 in both cases) when non-R&D activities are excluded. This result is consistent with Love and Roper's (1999) statement that the R&D effect has been overestimated in the absence of other innovation activities.