Product Innovation collaboration analysis

12 Oct 2010 Sandeep Mehta

The article Heterogeneous Firm-Level Effects of Knowledge Exchanges on Product Innovation: Differences between Dynamic and Lagging Product Innovators is quite difficult to read but has some interesting findings (or at least more empirical evidence of some intuitive conclusions).
The article divides firms as either dynamic innovators or those that follow other’s innovation (lagging innovators).  It also divides innovation information exchange (or collaboration) along three dimensions:

(1) information gathering applied in new product development,
(2) research cooperation on particular innovation projects, and
(3) managing information outflows to “appropriate” the innovation.

Thar article analyzes performance of firms engaging in knowledge exchange (collaboration for innovation) along three different dimensions:

(1) research intensity (a measure of innovative input);
(2) the share of revenue realized through innovative product sales (a measure of innovative output); and
(3) their impact on the growth in total revenue.

Here are the results:

  1. Amount of innovation (research intensity) is positively influenced by external input or collaborations – regardless of  the type of information exchange.  Also, this innovation drives innovative product sales (duh) and growth.
  2. Dynamic innovators gain more from collaborations than lagging (in terms off innovative product sales and growth)
  3. Dynamic innovators are open and do not try to “appropriate” innovation by keeping it from others
  4. Lagging innovators try to “appropriate”  innovations and benefit from that appropriation – although overall benefit of collaboration remains less than dynamic innovators (2 and 3 above)

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