Coding for intangible competitive advantage - mapping the distribution and characteristics of software-developing firms in the Swedish economy

Martin Andersson, Anna Kusetogullari and Joakim Wernberg

Industry and Innovation, 2023, vol. 30, issue 1, 17-41

Abstract: Software is at the core of digitalisation and is often claimed to play a central role in innovation and in shaping competition across industries and firms. There are yet few studies of the extent and nature of software development across firms. We employ a unique firm-level survey comprising 3,929 firms across Sweden to analyse the distribution and characteristics of firms that invest in software development and the orientation of their investments. The results confirm that software development activities are present in most industries, but heterogeneously distributed across firms. Internal software development is associated with innovation-oriented large firms in high-tech and knowledge-intensive industries, and is often affiliated with MNEs. The results suggest that software development is comparable to R&D investments and constitutes an example of digital innovation. This strengthens the value of studying software development activities to understand how firms invest in and build competitive advantage in the digitalised economy.

Date: 2023
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DOI: 10.1080/13662716.2022.2112396

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