Innovative Businesses and the Science and Technology Base

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Innovative Businesses and the Science and
Technology Base

• G. M. Peter Swann
• Manchester Business School
• University of Manchester
• pswann_at_man.mbs.ac.uk

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Research Questions

• For each different type of co-operation
  identified in CIS3, which sorts of companies
  co-operate in that way?
• For each information source identified in CIS3,
  which sorts of companies use that information
  source?
• For each measure of performance in CIS3, to what
  extent is co-operation associated with superior
  performance?
• For each measure of performance in CIS3, to what
  extent is the use of information sources
  associated with superior performance?

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Scope of this talk

• Bruce Tether has described our most recent work
  on questions (a) and (b)
• I shall focus now on questions (c) and (d) - i.e.
  the association between co-operation/information
  use and innovative performance

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Performance measures in CIS3

• Question 11.1 asks the respondent to indicate the
  effects of innovation activities on nine areas of
  performance, described by the mnemonics on the
  next slide
• Each of these variables is measured on a scale
  from 0 (no impact) to 3 (high impact)

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• FRANGE Increased range of goods and services
• FMKTSHRE Opened new market or increased market
  share
• FQUALITY Improved quality of goods or services
• FFLEXIB Improved production flexibility
• FLABOUR Reduced unit labour costs
• FCAPAC Increased capacity
• FMATERL Reduced materials and/or energy per
  produced unit
• FENVIRON Improved environmental impact or health
  and safety aspects
• FREGS Met regulations or standards

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Ordered Logit Models of Performance

• We estimate two groups of ordered logit models
• The first group models the score on each
  performance measure as a function of the
  respondents pattern of co-operation, and other
  variables
• The second group models the score on each
  performance measure as a function of the
  respondents pattern of information use, and
  other variables

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Types of Co-operation (0/1)

• POTHENT Other enterprises within enterprise
  group
• PSUPPL Suppliers of equipment, materials, ....
• PCLIENT Clients or customers
• PCOMPET Competitors
• PCONSLT Consultants
• PRDENT Commercial laboratories/RD enterprises
• PUNIV Universities or other HEIs
• PGOVT Government research organisations
• PPRI Private research institutes

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Information Sources (0/1/2/3)

• IFWITHIN Within the enterprise
• IFOTHENT Other enterprises within the enterprise
  group
• IFSUPPL Suppliers of equipment, materials, ...
• IFCLIENT Clients or customers
• IFCOMPET Competitors
• IFCONSLT Consultants
• IFRDLABS Commercial laboratories/RD
  enterprises
• IFUNIV Universities or other HEIs
• IFGOVT Government research organisations

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Information Sources (0/1/2/3), cont ...

• IFOTHPUB Other public sector (e.g. business
  links)
• IFPRI Private research institutes
• IFCONF Professional conferences and meetings
• IFTRADE Trade associations
• IFTECH Technical/Trade press, computer
  databases
• IFFAIRS Fairs, exhibitions
• IFSTAND Technical standards
• IFHEALTH Health and safety standards and
  regulations
• IFENVIRO Environmental standards and regulation

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Other Explanatory Variables

• XDESIGN Is enterprise engaged in design
  activities? (1/0)
• XEXTRA Is enterprise engaged in the acquisition
  of external RD? (1/0)
• XKNOW Is enterprise engaged in acquisition of
  other external knowledge? (1/0)
• XINTER Is enterprise engaged in intramural RD?
  (1/0)
• XMACH Is enterprise engaged in acquisition of
  machinery and equipment? (1/0)
• XMARKET Is enterprise engaged in internal or
  external marketing activities focused on the
  introduction of the innovation? (1/0)

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Other Explanatory Variables, cont ...

• XTRAIN Is enterprise engaged in training
  related to innovation activity? (1/0)
• SUPPORT Does enterprise receive public support?
  (1/0)
• ORGMKT Extent of and success of implementation
  of new marketing concepts/strategies
  (0/1/2/3)
• ORGMNGT Extent of and success of implementation
  of advanced management techniques (0/1/2/3)
• ORGORGAN Extent of and success of implementation
  of new organisational structures (0/1/2/3)
• ORGSTRAT Extent of and success of implementation
  of new corporate strategies (0/1/2/3)

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• Full results in
• G. M. P. Swann, Innovative Businesses and the
  Science and Technology Base An Analysis Using
  CIS3 Data, Report for Department of Trade and
  Industry, October 2002
• Available at
• http//www.dti.gov.uk/iese/cisreport1c.pdf

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Research Questions

• For each different type of co-operation
  identified in CIS3, which sorts of companies
  co-operate in that way?
• For each information source identified in CIS3,
  which sorts of companies use that information
  source?
• For each measure of performance in CIS3, to what
  extent is co-operation associated with superior
  performance?
• For each measure of performance in CIS3, to what
  extent is the use of information sources
  associated with superior performance?

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(Hemispherical) MDS Plot Coefficients in Model of
Co-operation and Performance
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Research Questions

• For each different type of co-operation
  identified in CIS3, which sorts of companies
  co-operate in that way?
• For each information source identified in CIS3,
  which sorts of companies use that information
  source?
• For each measure of performance in CIS3, to what
  extent is co-operation associated with superior
  performance?
• For each measure of performance in CIS3, to what
  extent is the use of information sources
  associated with superior performance?

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(Hemispherical) MDS Plot Coefficients in Model of
Information Use and Performance
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Aggregate Effects on Performance by Source of
Benefit
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Aggregate Effects on Performance by Beneficial
Effect
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Conclusions (1)

• Patterns of co-operation associated with good
  performance in one aspect of the production
  process are also associated with good performance
  in other aspects of the production process.
• On the other hand, patterns of co-operation
  associated with good performance in the product
  are rather different.

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Conclusions (2)

• Cooperation with the university is associated
  with higher performance in the process but not
  with higher performance in the product.
• In my early models of the propensity to
  co-operate, it appeared that the process
  innovator, was more likely than the product
  innovator to cooperate with the University.

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Conclusions (3)

• In aggregate, cooperation with RD labs, clients
  and other enterprises in the same group, and the
  use of these as information sources is associated
  with high performance.
• In aggregate, cooperation with universities and
  government research organisations is associated
  with high performance.
• In aggregate, the use of competitors and
  suppliers as information sources is associated
  with high performance.

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Conclusions (4)

• A small contribution to a realistic assessment of
  the role of the university in the innovation
  process.
• We should not expect the university to be all
  things to all innovators. Some innovation
  challenges call for cooperation with universities
  while others call for cooperation with others.
• The key is to understand the distinctive role of
  the university as an institution in the
  innovation process.