Category: Management of Innovation

Innovation & Failure

The Austrian Federal Economic Chamber invited me to speak at the bi-annual MIT Europe Conference in Vienna about ‘Innovation & Failure: The Basis for Building the Future’. This was a nice occasion to build a story around my research with Sören Petersen (formerly with the Technical University in Berlin, now with Google in Dublin).

In short: In the presentation I highlight that future challenges innovative solutions. Although innovation activities have the potential for failure, failure is a great opportunity for learning. To some degree – up to a certain point – innovation performance improves with increasing failure rates. The negative side effect of failure, however, is that it causes negative emotions and those might hamper the learning effect. Organizations can only learn from failures when they are able to handle those negative emotions.

Here is a video of the full presentation.

 

 

How Robust are the Results?

Today I have the pleasure to present some of our (Galia, Laursen, Salter and my) recent research. Here is briefly what it is about:

Introduction.

As stated by Hubbard, Vetter and Little (1998: 251): “The goal of science is empirical generalization, or knowledge development leading to some degree of understanding.” However, in many fields of science, the integrity of the pertinent empirical literatures are open to question because of what Rosenthal (1979) dubbed the “file drawer problem,” which implies that journals may be dominated by papers reporting results that are Type I errors (erroneous rejections of the null hypothesis), while the null outcome remain in the file drawers of researchers. In the top five journals of strategic management research, Goldfarb and King (2016) report that between 24 to 40 percent of the findings are likely the result of chance rather than a reflection of true relationships.

Replication studies can help reduce this problem by establishing a set of robust empirical results (Bettis, 2012). In addition, even if we assume away the “file drawer problem”, statistical tests by nature produce Type I errors. The result is that in strategic management general and in open innovation research in particular, we know too little about which results are empirically generalizable, and hence whether they potentially add to our understanding. In many cases, however, researchers work on similar data sets and use similar or identical dependent variables, so that in principle, the robust (and not so robust) results could be extracted, while controlling for a host of other factors. When such general datasets are available, large scale replication studies can be conducted. By large-scale replication studies, we mean studies where different independent variables are included in a single empirical model with the same dependent variable. However, in these large scale replications as in most empirical applications, the “true model”, and therefore, the appropriate selection of explanatory variables, is essentially unknown, which leads to a phenomenon described as “model uncertainty” (Chatfield, 1995). Disregarding model uncertainty results in too small standard errors and too strong confidence in the statistical findings (Raftery, 1995). Additionally, it is model uncertainty that fundamentally facilitates the “file drawer problem”.

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Innovation Might not Work – Failure

Last week we had a great session at a conference in Vienna. It was about failure. Interestingly the Austrian daily Der Standard extensively covered the session well. Find the online version of the article here. The open discussion of failure seems to be something that attracts media attention, particularly when you can show that failure presents a valuable opportunity for learning.

So we decided to have a comparable session at the Researchers Night (Lange Nacht der Forschung) on April 22.

 

 

Recruitment, Knowledge Integration and Modes of Innovation

 

About a week or so ago we received the favorable editorial decision about our (Sverre, Tore and I) paper “Recruitment, knowledge integration and modes of innovation” has been accepted for publication in Research Policy.

In the paper we investigate how the intrinsic characteristics of firms’ knowledge bases and processing routines have evolved with the past inflow of employees into the firm. The empirical analysis is based on linked public register and innovation survey data for Norway merged with the Norwegian innovation survey. We find that recruitment from universities, research institutes and higher education institutions increases the capacity of the firm to generate technical inventions. Yet, the organizational knowledge bases and processing routines on which commercial innovation output depends, are strengthend only by the recruitment that has occurred from related industries. In the conclusion we draw implications for research, management and policy.

Recruitment, knowledge integration and modes of innovation

Today I give a presentation at the Public Policy and Global Affairs Programme Seminar at Nanyang Technological University, Singapore. I present a joint paper with Sverre Herstad and Tore Sandven titled “Recruitment, knowledge integration and modes of innovation”.

Commodity trade, innovation collaboration and labor mobility are considered the primary channels through which knowledge diffuse between firms, industries and economies. As the commitment of firms to global production and innovation networks grows, it is becoming increasingly important to understand how the more localized knowledge spillovers, which are attributable to mobility flows, influence the innovativeness of firms and the growth of economies. This paper investigates how the intrinsic characteristics of firms’ knowledge bases and processing routines have evolved with the past inflow of employees. The empirical analysis is based on linked public register and innovation survey data for Norway. It finds recruitment from universities, research institutes and higher education institutions to have increased the capacity of the firm to generate technical inventions. Yet, the organizational knowledge bases and processing routines on which commercial innovation output depends have been found to be strengthened only by the recruitment that has occurred from related industries. Implications for research, management and policy are drawn.

The slides of the presentation are here:

Urban agglomerations, knowledge intensive services and innovation: Establishing the core connections

It took us a while to go from an idea to an accepted paper. But now Sverre Herstad and I have received the news that our paper “Urban agglomerations, knowledge intensive services and innovation: Establishing the core connections” is accepted for publication in Entrepreneurship and Regional Development.

In this paper we investigate how resources available in urban agglomerations influence the (1) organizational form, (2) innovation activity and (3) collaborative linkages of knowledge intensive business services firms (KIBS). We use rather comprehensive Norwegian data: We use the Norwegian employer-employee (LEED) registers for the years 2000 -2008 to connect the organizational forms and labour market positions of individual KIBS to their physical locations. For the decision to engage and for subsequent collaborative ties we utilize unique establishment-level information available from the Norwegian Community Innovation Survey of 2008.

We find that compared to their counterparts elsewhere, KIBS located in Norwegian large-city labour market regions are more likely to be independent from multi-establishment business organizations and thus reliant on resources available externally, in their locations. This is most pronounced in the central and western business districts of the capital, wherein independent KIBS exhibit high turnover of professionals and are less inclined to engage actively in innovation. Yet, those that do engage use the capital region economy as a platform for engaging with both domestic and international collaboration partners. Only by consecutively analysing these aspects and accounting for the selection processes involved is the empirical analysis able to uncover contrasting firm-level responses to the same urban economy resource base.

Best Paper Award

Recently we received the news that our paper “Open innovation practices and their effect on innovation performance” published by the International Journal of Innovation and Technology Management has received the Best Paper Award 2012 by the journal. To the best of our knowledge this paper is the first to develop a complete indicator framework for examining open innovation practices and their impact on innovativeness and commercial innovation performance. The analysis  yields a number of results which are relevant for innovation management and policy. Visit IJITM’s site here. Implications for innovation policy are discussed more thoroughly here.

One of the most downloaded articles in Applied Economic Letters

We have just received the notice that our paper “The relationship between international innovation collaboration, intramural R&D and SMEs innovation performance: a quantile regression approach” is among the Top 10 of the most downloaded papers in Applied Economics Letters in 2013. Currently it is free for download.

On Industrial Knowledge Bases, Commercial Opportunities and Global Innovation Network Linkages

Our (Sverre J. Herstad, Heidi Wiig Aslesen and my) paper “On industrial knowledge bases, commercial opportunities and global innovation network linkages” publication by Research Policy  is now online available  .

It is commonly argued that we are witnessing a shift from global production networks, driven by the search for markets and lower cost production sites, to global innovation networks (GINs), driven by the search for knowledge. This paper explores how sources of behavioural differentiation derived from the literature on industrial knowledge bases and technological regimes condition the degree of international involvement and influence the likelihood that a truly global network configuration is established by the firm. We find this to be clearly influenced by the nature of knowledge and the cumulativeness of knowledge development, the active use of measures to protect intellectual property, the inherent need to innovate and the opportunity to generate sales from this activity.

Does Offshoring Hurt Domestic Innovation Activities?

I have (together with Bernhard Dachs, Steffen Kinkel, and Oliver Som) contributed a column to the VoxEU.org.

VoxEU.org is a policy portal set up by the Centre for Economic Policy Research (www.CEPR.org) in conjunction with a consortium of national sites. Vox aims to promote research-based policy analysis and commentary by leading scholars. The intended audience is economists in governments, international organisations, academia and the private sector as well as journalists specializing in economics, finance and business. Assistance for the Centre’s work on Vox has been provided by the European Union, through its programme of support for bodies active at the European level in the field of active European citizenship.

Based on our initial research Bernhard and I have teamed up with Steffen Kinkel and Oliver Som, who are behind the inception of the European Manufacturing Survey, that we have used for this project. We have contributed a short summary of our revised research on the effects of offshoring on innovation in the home country.