UNU-MERIT Working Papers Series
How firms innovate: R&D, non-R&D, and technology adoption
Can Huang, Anthony Arundel & Hugo Hollanders #2010-027Non-R&D innovation is a common economic phenomenon, though R&D has been
the central focus of policy making and scholarly research in the field
of innovation. An analysis of the third European Community Innovation
Survey (CIS-3) results for 15 countries finds that almost half of
innovative European firms did not perform R&D in-house. Firms with weak
in-house innovative capabilities and which source information from
suppliers and competitors tend to innovate through non-R&D activities.
In contrast, firms that engage in product innovation, find clients,
universities and research institutions an important information source
for innovation, or apply for patents or use other appropriation methods
are more likely to perform R&D. However, non-R&D performers do not form
a consistent block, with several notable differences between firms that
use three different methods of innovating without performing R&D. Many
of these determinants also influence the share of total innovation
expenditures that are spent on non-R&D innovation activities.
Furthermore, an analysis of the determinants of the share of each firm’s
total innovation expenditures for non-R&D activities shows that the
factors that influence how innovation expenditures are distributed is
generally consistent across sectors and European countries.
Key Words: Non-R&D innovation, Technology adoption, Community Innovation
Survey, CIS, R&D, Innovation
JEL Classification: O31, O32, O33, L13, L60
UNU-MERIT Working Papers
ISSN 1871-9872
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