Innovation in Agriculture:

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• Innovation in Agriculture
• Innovators, Early Adopters and Laggards
• Paul Diederen, Hans van Meijl, Arjan Wolters
• Agricultural Economics Research Institute (LEI)
• The Hague (NL)

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Basic research questions and results

• What makes a company innovative?
• Both firm characteristics and behavioural
  characteristics
• What effects does innovation have on the
  performance of a company?
• Innovative firms perform better in terms of
  profit, and to some extent also in terms of
  growth

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Cause and effect
Drivers firm charac- teristics
environ- mental changes
Behaviour investments search networking
Perfor- mance profits growth
Innovation
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Dutch agriculture

• Dutch farmers classified according to their
  degree of innovativeness

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Conclusions

• Firm characteristics distinguish frontrunners and
  laggards
• Behavioural characteristics distinguish
  innovators and early adopters

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Data collection

• Survey
• - New for your company?
• - New for your sector?
• - Behavioural characteristics
• FADN/CBS
• - Firm characteristics
• Sample
• - Representative sample 1250 (FADN)
• - Front runners 250
• Period 1995 - 1997

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Models I and II logit

• Dependent
• Front runner versus laggard
• Innovator versus early adopter
• Independents
• Size
• Relative size
• Farmers age
• Solvency
• Sector

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Sectors
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Results I
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Model III logit

• Added independents
• Innovation routine
• Internal information
• External information
• Innovation intensity
• Source of ideas
• Co-operation
• Protection of IPR
• Follow up

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Results II
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Models IV and V lines

• Dependent
• profit rate
• growth rate
• Independents
• Innovativeness
• Size
• Relative size
• Farmers age
• Solvency
• Sector

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Results III
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Main Conclusions

• Firm characteristics distinguish frontrunners and
  laggards
• Behavioural characteristics distinguish
  innovators and early adopters
• Non-adopters make less profit
• Early adopters grow fastest

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Relevancy to policy-makers

• Policy should stimulate the behaviour that is
  positively correlated with innovation.
• Policy must be differentiated, accounting for the
  fact that firm characteristics influence the
  outcome of innovation processes.
• Be careful to use subsidies as a policy instrument

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