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Measuring the impact of innovative human capital on small firms’ propensity to innovate

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  • McGuirk, Helen
  • Lenihan, Helena
  • Hart, Mark

Abstract

The ability to identify and evaluate the competitive advantage of employees’ transferable and innovative characteristics is of importance to firms and policymakers. This research extends the standard measure of human capital by developing a unique and far reaching concept of Innovative Human Capital and emphasises its effect on small firm innovation and hence growth (jobs, sales and productivity). This new Innovative Human Capital concept encapsulates four elements: education, training, willingness to change in the workplace and job satisfaction to overcome the limitations of measurements used previously. An augmented innovation production function is used to test the hypothesis that small firms who employ managers with Innovative Human Capital are more likely to innovate. There is evidence from the results that Innovative Human Capital may be more valuable to small firms (i.e. less than 50 employees) than larger-sized firms (i.e. more than 50 employees). The research expands innovation theory to include the concept of Innovative Human Capital as a competitive advantage and determinant of small firm innovation; and distinguishes Innovative Human Capital as a significant concept to consider when creating public support programmes for small firms.

Suggested Citation

  • McGuirk, Helen & Lenihan, Helena & Hart, Mark, 2015. "Measuring the impact of innovative human capital on small firms’ propensity to innovate," Research Policy, Elsevier, vol. 44(4), pages 965-976.
  • Handle: RePEc:eee:respol:v:44:y:2015:i:4:p:965-976
    DOI: 10.1016/j.respol.2014.11.008
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    1. Adamu Jibir & Musa Abdu, 0. "Human Capital and Propensity to Protect Intellectual Properties as Innovation Output: the Case of Nigerian Manufacturing and Service Firms," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 0, pages 1-25.
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    3. Lenihan, Helena & McGuirk, Helen & Murphy, Kevin R., 2019. "Driving innovation: Public policy and human capital," Research Policy, Elsevier, vol. 48(9), pages 1-1.
    4. TEKAM OUMBE, Honoré & PILAG KAKEU, Charles Bertin & Miamo Wendji, Clovis, 2019. "Impact de la qualité du capital humain sur la capacité d’innovation des PME : application sur un pays en développement [Impact of quality of human capital on the innovation capacity of SMEs: applic," MPRA Paper 92380, University Library of Munich, Germany.
    5. Protogerou, Aimilia & Caloghirou, Yannis & Vonortas, Nicholas S., 2017. "Determinants of young firms’ innovative performance: Empirical evidence from Europe," Research Policy, Elsevier, vol. 46(7), pages 1312-1326.
    6. Umer Ayub & Abdul Rashid Kausar & Mubashar Majeed Qadri, 2017. "Linking Human Capital and Organisational Innovative Capabilities of Financial Institutions: Evidence from a Developing Country of South Asia," Journal of Information & Knowledge Management (JIKM), World Scientific Publishing Co. Pte. Ltd., vol. 16(04), pages 1-23, December.
    7. Wojciech Grabowski & Anna Staszewska-Bystrova, 2020. "The Role of Public Support for Innovativeness in SMEs Across European Countries and Sectors of Economic Activity," Sustainability, MDPI, Open Access Journal, vol. 12(10), pages 1-19, May.
    8. Castillo-Apraiz, Julen & Matey de Antonio, Jesús, 2018. "Does quality pay in the pharmaceutical industry? The mediating role of training of personnel between quality management and performance," Revista de Dirección y Administración de Empresas, Universidad del País Vasco - Escuela Universitaria de Estudios Empresariales de San Sebastián.
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    11. García-Vega, María & Vicente-Chirivella, Óscar, 2020. "Do university technology transfers increase firms’ innovation?," European Economic Review, Elsevier, vol. 123(C).
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    13. Gabriele Pellegrino & Mariacristina Piva, 2020. "Innovation, industry and firm age: are there new knowledge production functions?," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 10(1), pages 65-95, March.
    14. Giuseppe Arcuri & Nadine Levratto & Aziza Garsaa & Lara Abdel Fattah, 2019. "Firm soundness and knowledge externalities: a comparative regional analysis," EconomiX Working Papers 2019-10, University of Paris Nanterre, EconomiX.
    15. Koski, Heli, 2015. "Commercial success of innovation: the roles of R&D cooperation and firm age," ETLA Working Papers 30, The Research Institute of the Finnish Economy.
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    17. Pelucha, Martin & Kveton, Viktor & Potluka, Oto, 2019. "Using mixed method approach in measuring effects of training in firms: Case study of the European Social Fund support," Evaluation and Program Planning, Elsevier, vol. 73(C), pages 146-155.
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