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Innovate or Die? A critical review of the literature on innovation and performance

Author

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  • Stefano Brusoni

    (CESPRI-CRORA, Bocconi University and Silvio Tronchetti-Provera Foundation, Milano,Italy.)

  • Elena Cefis

    (Utrecht School of Economics, Utrecht University and Bergamo University)

  • Luigi Orsenigo

    (University of Brescia and CESPRI, Bocconi University, Italy)

Abstract

The idea that innovation leads to positive economic performance has become a sort of truism in recent years. However, empirical evidence showing that innovating organizations and countries outperform non-innovating ones remains scant and scattered. In many ways, the jury is still out. First of all, there is still little agreement about what ‘performance’ means. The range of indicators adopted in the literature varies widely: financial performance, market shares, new products introduced into the market, patents, GDP growth, and so on. Second, the time lag between innovative efforts and performance is often so large, and so industry specific, that it remains just very hard to produce reliable estimates. Third, it is still unclear at what level of analysis one should go looking for positive economic performance. Studies exist that look at the relationship between performance and innovation at the level of design teams, projects, firms, networks, industries, and countries. This paper aims at critically reviewing the wide, yet remarkably scattered literature that aims at measuring and explaining the relationship between innovation and performance. It builds upon an extensive review of contributions in economics, management and organisation sciences to identify trends and results that are consistent and robust. In a nutshell, this paper argues that country- and sectoral-level approaches which emphasize the role that knowledge, spillovers and human capital play in fostering economic growth trough innovation need to consider the fundamental role played by competition among heterogeneous organisations in igniting the growth process. In this respect, micro-and firm-level studies can provide useful insights about how competition fosters learning, innovation and ultimately growth.

Suggested Citation

  • Stefano Brusoni & Elena Cefis & Luigi Orsenigo, 2006. "Innovate or Die? A critical review of the literature on innovation and performance," KITeS Working Papers 179, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Sep 2006.
  • Handle: RePEc:cri:cespri:wp179
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    References listed on IDEAS

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    Cited by:

    1. Voeten, Jaap & Haan, Job de & Groot, Gerard de, 2009. "Is that Innovation? Assessing Examples of Revitalized Economic Dynamics among Clusters of Small Producers in Northern Vietnam," MERIT Working Papers 055, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    2. Francesco Lamperti & Roberto Mavilia & Simona Castellini, 2017. "The role of Science Parks: a puzzle of growth, innovation and R&D investments," The Journal of Technology Transfer, Springer, vol. 42(1), pages 158-183, February.
    3. A. Arrighetti & R. Brancati & A. Lasagni & A. Maresca, 2015. "Firms’ heterogeneity and performance in manufacturing during the great recession," Economics Department Working Papers 2015-EP03, Department of Economics, Parma University (Italy).
    4. Oliver Falck, 2007. "Heavyweights – The Impact of Large Businesses on Productivity Growth," CESifo Working Paper Series 2135, CESifo Group Munich.
    5. Martijn J. Smit & Maria A. Abreu & Henri L.F. Groot, 2015. "Micro-evidence on the determinants of innovation in the Netherlands: The relative importance of absorptive capacity and agglomeration externalities," Papers in Regional Science, Wiley Blackwell, vol. 94(2), pages 249-272, June.

    More about this item

    Keywords

    Innovation; Growth; Knowledge; Performance; Competition.;

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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    1. Socio-Economics of Innovation

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