Academic journal article Innovation: Organization & Management

Determinants of Innovation Capacity: Empirical Evidence from Services Firms

Academic journal article Innovation: Organization & Management

Determinants of Innovation Capacity: Empirical Evidence from Services Firms

Article excerpt

In the last decades we have seen an evolution of the service sector's role in the economy, its rel- evance increasing in innovation, competitiveness, employment and economic growth (de Jong, Bruins, Dolfsma, & Meijaard, 2003; Hauknes, 1998; Howells & Tether, 2004; Tether, 2005). A study carried out in the European Union corrobo- rates these facts, since in 2004, the service sector, on average, accounted for 39.9% of total employ- ment in the EU-25 and for 46.2% of added value (Arundel, Kanerva, Cruysen, & Hollanders, 2007). From the growing importance of this sec- tor, it becomes important to analyze the deter- minant factors of innovation capacity in firms in general and services firms in particular.

This study aims to analyze the degree of impor- tance of investment and expenditure on innovative activities for the innovation capacity of services firms. Other studies (Moreira, Silva, Simões, & Sousa, 2012; Silva, 2003; Silva & Leitão, 2009), analyzed some determinants that presented a sig- nificant impact on industrial firms' innovation capacity, but for services the factors stimulating and restricting innovation capacity have yet to be identified and analyzed.

The paper takes as reference the approaches to innovation in service. Considering this conceptual framework, this investigation intends to elaborate an empirical support to allow identification and analysis of the factors that affect innovation activ- ity and performance in Portuguese services firms.

To test empirically the hypotheses formulated, use is made of secondary data supplied by the1 Higher Education and Science Observatory' (Observatório da Ciência e do Ensino Superior, OCES), belonging to the 4th Community Innovation Survey (CIS 4). This questionnaire was implemented under the supervision of EUROSTAT. To the data obtained, we apply the model of generalized linear regression, namely the logistic regression model.

The study is structured as follows: Point two reviews the relevant literature on the subject of inno- vation in services and, based on this, formulates the hypotheses we intend to test empirically in the statis- tical model. Point three defines the sample and goes on to describe and characterize the variables used in the empirical study, with presentation of the logistic regression model. Point four analyzes the data. The final point presents final considerations and suggests that future investigations are carried out.

Literature review

The importance of the innovation process in ser- vices is widely recognized, both theoretically and empirically, but the heterogeneity of the service sector and the lack of an innovation typology that allows integration of that diversity make theoreti- cal teaching and empirical analyses difficult.

The literature demonstrates a growing interest in the study of innovation in services. The service sec- tor covers a wide range of different activities with greatly differentiating characteristics (Drejer, 2004; Hauknes, 1998; Hipp & Grupp, 2005; Main ardes, Silva, & Domingues, 2010; Mas-Verdú, 2007; Miles, 2005a; Vries, 2006).

According to Miles, 2005b, 'despite services being defined differently by different authors, common characteristics are pointed out in the lit- erature on innovation in services'. Many services are characterized by intangibility, inseparability, interactivity and variability, as well as weak pro- tection of intellectual property.

Theoretical approaches to innovation in ser- vices have developed rapidly in recent decades (Grönroos, 2000; Miles, 2008; Miozzo & Soete, 2001; Sundbo, 1997) and can be grouped in the following approaches: Negligence, assimilation, demarcation, and later, the synthesis approach (Coombs & Miles, 2000; Drejer, 2004; Freeman & Louçã, 2001; Gallouj, 1998, 2002; Hauknes, 1998; Howells & Tether, 2004; Miles, 2005a; Sundbo & Gallouj, 1998; Vries, 2006). Studies about innovation in services are relatively new and were categorized in four groups according to their respective approaches. …

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