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Non-technological and Technological Innovation: Strange Bedfellows?

  • Schmidt, Tobias
  • Rammer, Christian

Non-technological innovation is an important element of firms? innovation activities that both supplement and complement technological innovation, i.e. the introduction of new products and new processes. We analyse the spread of nontechnological innovation in firms, their relation to technological innovation, and their effects to firm performance and success with product and process innovation, using data from the German Community Innovation Survey conducted in 2005 (German CIS 4). Non-technological innovation is defined as the introduction of new organisational methods or the introduction of new marketing methods. We find that the determinants of a firm?s propensity to introduce technological and non-technological innovations are very similar and that both types are closely related. There are only small effects of non-technological innovation on a firm? profit margin, which contrasts the strong effects to be found from technological innovation. However, non-technological innovation spurs success with product and process innovation terms of sales with market novelties and cost reductions from new processes.

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Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 07-052.

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Date of creation: 2007
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Handle: RePEc:zbw:zewdip:6355
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  1. Bronwyn H. Hall, 2002. "The Financing of Research and Development," NBER Working Papers 8773, National Bureau of Economic Research, Inc.
  2. Brian Cozzarin & Jennifer Percival, 2006. "Complementarities between organisational strategies and innovation," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(3), pages 195-217.
  3. Cohen, Wesley M & Levinthal, Daniel A, 1989. "Innovation and Learning: The Two Faces of R&D," Economic Journal, Royal Economic Society, vol. 99(397), pages 569-96, September.
  4. Laura Abramovsky & Elisabeth Kremp & Alberto López & Tobias Schmidt & Helen Simpson, 2005. "Understanding co-operative R&D activity: evidence from four European countries," IFS Working Papers W05/23, Institute for Fiscal Studies.
  5. Hipp, Christiane & Grupp, Hariolf, 2005. "Innovation in the service sector: The demand for service-specific innovation measurement concepts and typologies," Research Policy, Elsevier, vol. 34(4), pages 517-535, May.
  6. Bruno Cassiman & Reinhilde Veugelers, 2002. "R&D Cooperation and Spillovers: Some Empirical Evidence from Belgium," American Economic Review, American Economic Association, vol. 92(4), pages 1169-1184, September.
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