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


  • Ketokivi, Mikko
  • Ali-Yrkkö, Jyrki


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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    More about this item


    Innovation; firm; growth; non-technical; technological; technical;

    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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