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Innovation Does Not Equal R&D. Strategic Innovation Profiles and Firm Growth

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  • Ketokivi, Mikko
  • Ali-Yrkkö, Jyrki

Abstract

In this paper, we examine firm innovation and its link to firm growth. Instead of using the conventional conceptualization and operationalization of innovation in terms of the R&D budget, we use a more elaborate 12-dimensional conceptualization, which takes into account also the non-technological aspects of innovation. The 12-dimensional operationaliza-tion further enables the examination of strategic innovation profiles of individual firms. We find that different kinds of innovation activity all have effects on firm growth, but in different ways. R&D activity is important in that it leads to introduction of new products, but innovation in other dimensions – value chain strategy, brand, and distribution channels – is also linked to new product introduction. Value chain innovation is also related to the development and introduction of new services: innovation aimed at development and improvement of the customer experience in particular has a significant role in the development and introduction of new services.

Suggested Citation

  • Ketokivi, Mikko & Ali-Yrkkö, Jyrki, 2010. "Innovation Does Not Equal R&D. Strategic Innovation Profiles and Firm Growth," Discussion Papers 1220, The Research Institute of the Finnish Economy.
    • Handle: RePEc:rif:dpaper:1220
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    References listed on IDEAS

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    1. Andrew H. Van de Ven, 1986. "Central Problems in the Management of Innovation," Management Science, INFORMS, vol. 32(5), pages 590-607, May.
    2. Van de Ven, Andrew R., 1986. "Central Problems in the Management of Innovation," Agricultural Research Policy Seminar 139708, University of Minnesota Extension.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Innovation; firm; growth; non-technical; technological; technical;
    All these keywords.

    JEL classification:

    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • L8 - Industrial Organization - - Industry Studies: Services
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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