Competence and Organization: Two Drivers of Innovation

J. P. Francois, F. Favre and S. Negassi

Economics of Innovation and New Technology, 2002, vol. 11, issue 3, 249-270

Abstract: This paper demonstrates the effects of organizational factors and computerization changes on innovation. Indeed, the innovation capacity depends more on a company's organization than on its size. The econometric results show that, when the organizational structure is integrated into a Schumpeter's model with flexibility, reactivity, risk-taking, internal communication and the establishing of a strategy, the significance of the company size decreases by half. Our work underlines the importance of the level of self-sufficiency and the recognition of a researcher's status. In addition, it demonstrates that the mass of knowledge needed is constantly increasing because of constant technological progress, making it indispensable for a company to open up towards the outside world, more particularly through cooperation. Recourse to R&D cooperation provides access to information and to new abilities that can improve the technological capabilities of a firm. It underlines that the condition needed to be able to benefit from the competence of a partner is to have, first of all, agreement to share a stock of complementary and common knowledge, a condition that will boost the performance of partner companies. Connection to the Internet has a greater effect upon innovation capacities than does the simple networking of microcomputers, and can lead to reorganizing work within companies, with the possibility of more intense information sharing. The company would subsequently organize task sharing internally, and as regards the outside world, not on hierarchical bases, but on those of shared interest in a given goal. The greater speed in information transmission would permit an increase in the speed of change in the environment and thereby, a shortening of the deadlines for defining and marketing innovations.

Keywords: Innovation; Organization (search for similar items in EconPapers)
Date: 2002
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Citations: View citations in EconPapers (10)

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DOI: 10.1080/10438590210906

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