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Innovation Networks of High Tech SMES: Creation of Knowledge but no Creation of Value

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  • Rob Winters

    (Netherlands Ministry of the Interior and Kingdom Relations)

  • Erik Stam

    ()
    (University of Cambridge, Utrecht University; Max Planck Institute of Economics)

Abstract

This paper analyses the effects of innovation networks on product and process innovation and sales growth of high technology SMEs. Innovation net- works are positively related to both product and process innovation, i.e. knowledge creation. One exception is the negative effect of innovation networks with suppliers on product innovation. Older SMEs are more product innovative than young SMEs. The positive relation between firm size and (process) innovation, disappears when networks are introduced into the analyses. The general conclusion is that vertical innovation networks remove the effect of firm size on process innovation. In other words, high-tech SMEs can ‘borrow’ size if they co-operate with customers, but especially with suppliers for process innovation. So smallness is not necessarily a disadvantage for innovation, as long as firms cooperate with other organisations. Innovation and networks do not seem to effect value creation, measured as sales growth.

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Bibliographic Info

Paper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2007-042.

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Date of creation: 31 Jul 2007
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Handle: RePEc:jrp:jrpwrp:2007-042

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Keywords: innovation; innovation networks; high tech SMEs; firm growth;

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