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External Interaction, Innovation and Productivity: An Application of the Innovation Value Chain to Ireland

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  • Justin Doran
  • Eoin O'Leary

Abstract

Abstract This paper analyses the innovation value chain for the Irish Community Innovation Survey (CIS): 2004–2006. In estimating innovation and productivity simultaneously, it extends the CDM methodology to include a range of external knowledge sources. Feedback effects are found to be vital, with more productive firms being more innovative and vice versa. External knowledge sources affect the innovation decision but not innovation performance, thus pointing to the primacy of internal processes for the crucial task of knowledge exploitation. There is evidence of dichotomous knowledge sourcing in Ireland, with some firms sourcing from market and others, especially high-technology businesses, from non-market agents. External interaction, innovation et productivité extérieure: une application de la chaîne de valeur de l'innovation à l'Irlande La présente communication analyse la chaîne de valeur d'innovation pour le CIS : 2004–2006 irlandais. En estimant l'innovation et la productivité simultanément, elle procède au développement de la méthodologie CDM, en incorporant un éventail de sources de connaissances extérieures. Il s'avère que les effets de la rétroaction sont essentiels, les entreprises les plus productives étant plus innovantes et vice-versa. Des sources de connaissances externes affectent les décisions sur l'innovation, mais non pas les performances de l'innovation, en soulignant ainsi l'importance primordiale des procédés internes pour la tâche essentielle de l'exploitation des connaissances. On a relevé des traces des sourçage dichotomique des connaissances en Irlande, certaines entreprises s'approvisionnant directement sur le marché, d'autres, notamment dans le secteur des technologies de pointe, s'inspirant d'agents extérieurs au marché. Interacción, innovación y productividad externas: una aplicación de la cadena de valor de la innovación en Irlanda En este trabajo se analiza la cadena de valor de la innovación de Irish CIS: 2004–2006. Al estimar simultáneamente la innovación y la productividad, se amplía la metodología CDM para abarcar una serie de fuentes externas de conocimiento. En este análisis se concluyó que los efectos de la realimentación son vitales, dado que más firmas productivas son más innovadoras y viceversa. Las fuentes externas de conocimiento afectan las decisiones de innovación y no el rendimiento asociado con la innovación y, por consiguiente, se señala el predominio de los procesos internos para la tarea crucial de explotación del conocimiento. En Irlanda, hay evidencias de obtención dicotómica del conocimiento, con algunas firmas que lo obtienen en el mercado y otras, en especial las empresas de alta tecnología, a través de agentes fuera del mercado.

Suggested Citation

  • Justin Doran & Eoin O'Leary, 2011. "External Interaction, Innovation and Productivity: An Application of the Innovation Value Chain to Ireland," Spatial Economic Analysis, Taylor & Francis Journals, vol. 6(2), pages 199-222.
  • Handle: RePEc:taf:specan:v:6:y:2011:i:2:p:199-222
    DOI: 10.1080/17421772.2011.557777
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    Cited by:

    1. Justin Doran & Declan Jordan & Eoin O'Leary, 2012. "The Effects of National and International Interaction on Innovation: Evidence from the Irish CIS: 2004--06," Industry and Innovation, Taylor & Francis Journals, vol. 19(5), pages 371-390, July.
    2. Doran, Justin & O'Leary, Eoin, 2013. "The Roles of R&D and networking for innovation by Irish and foreign-owned firms: evidence from the Irish CIS 2006-08," MPRA Paper 47291, University Library of Munich, Germany.
    3. Vokoun Marek, 2017. "Characteristics of the innovation activities of firms in Europe: a critical review of international differences," Review of Economic Perspectives, Sciendo, vol. 17(3), pages 239-262, September.
    4. B. Fingleton & P. Cheshire & H. Garretsen & D. Igliori & J. Le Gallo & P. McCann & J. McCombie & V. Monastiriotis & B. Moore & M. Roberts, 2011. "We Move into Distinguished Company," Spatial Economic Analysis, Taylor & Francis Journals, vol. 6(2), pages 133-138.
    5. Justin Doran & Eoin O'Leary, 2016. "The Innovation Performance of Irish and Foreign-owned Firms: The Roles of R&D and Networking," The World Economy, Wiley Blackwell, vol. 39(9), pages 1384-1398, September.
    6. Justin Doran & Geraldine Ryan, 2014. "Eco-Innovation – does additional engagement lead to additional rewards?," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 41(11), pages 1110-1130, November.
    7. Justin Doran & Geraldine Ryan, 2016. "The Importance of the Diverse Drivers and Types of Environmental Innovation for Firm Performance," Business Strategy and the Environment, Wiley Blackwell, vol. 25(2), pages 102-119, February.
    8. O’Leary Eoin, 2018. "Planning Ireland to 2040: How to address our economic development policy weaknesses," Administration, Sciendo, vol. 66(1), pages 89-105, February.
    9. Maja Savic & Helen Lawton Smith & Ioannis Bournakis, 2014. "The effect of external knowledge sources and their geography on innovation in Knowledge Intensive Business Services (KIBS) SMEs; some Implications for de-industrialised regions in the UK," Working Papers 18, Birkbeck Centre for Innovation Management Research, revised Aug 2014.
    10. Doran, Justin & Ryan, Geraldine, 2012. "Regulation and Firm Perception, Eco-Innovation and Firm Performance," MPRA Paper 44578, University Library of Munich, Germany.
    11. Helen McGuirk & Declan Jordan, 2011. "Local Labour Market Diversity and Business Innovation: Evidence from Irish Manufacturing Businesses," European Planning Studies, Taylor & Francis Journals, vol. 20(12), pages 1945-1960, June.
    12. Justin Doran & Declan Jordan, 2016. "Cross-sectoral differences in the drivers of innovation," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 43(5), pages 719-748, October.
    13. J Doran & G Ryan, 2016. "The effectiveness of R&D and external interaction for innovation: Insights from quantile regression," Economic Issues Journal Articles, Economic Issues, vol. 21(1), pages 47-65, March.
    14. Doran, Justin & Jordan, Declan & O'Leary, Eoin, 2013. "Effects of R&D spending on Innovation by Irish and Foreign-owned Businesses," MPRA Paper 44579, University Library of Munich, Germany.
    15. Doran, Justin, 2012. "Are different forms of innovation complements or substitutes?," MPRA Paper 44580, University Library of Munich, Germany.
    16. Justin Doran & Geraldine Ryan & Jane Bourke & Frank Crowley, 2019. "In-House Or Outsourcing Skills: How Best To Manage For Innovation?," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 24(01), pages 1-25, February.
    17. Ruane, Frances & Siedschlag, Iulia, 2011. "Boosting Innovation and Productivity in Enterprises: What Works?," Papers EC3, Economic and Social Research Institute (ESRI).

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    More about this item

    Keywords

    Innovation; productivity; innovation value chain; O31; O32;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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