Innovate or Die? A critical review of the literature on innovation and performance

Stefano Brusoni (), Elena Cefis and Luigi Orsenigo

No 179, KITeS Working Papers from KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy

Abstract: The idea that innovation leads to positive economic performance has become a sort of truism in recent years. However, empirical evidence showing that innovating organizations and countries outperform non-innovating ones remains scant and scattered. In many ways, the jury is still out. First of all, there is still little agreement about what ‘performance’ means. The range of indicators adopted in the literature varies widely: financial performance, market shares, new products introduced into the market, patents, GDP growth, and so on. Second, the time lag between innovative efforts and performance is often so large, and so industry specific, that it remains just very hard to produce reliable estimates. Third, it is still unclear at what level of analysis one should go looking for positive economic performance. Studies exist that look at the relationship between performance and innovation at the level of design teams, projects, firms, networks, industries, and countries. This paper aims at critically reviewing the wide, yet remarkably scattered literature that aims at measuring and explaining the relationship between innovation and performance. It builds upon an extensive review of contributions in economics, management and organisation sciences to identify trends and results that are consistent and robust. In a nutshell, this paper argues that country- and sectoral-level approaches which emphasize the role that knowledge, spillovers and human capital play in fostering economic growth trough innovation need to consider the fundamental role played by competition among heterogeneous organisations in igniting the growth process. In this respect, micro-and firm-level studies can provide useful insights about how competition fosters learning, innovation and ultimately growth.

Keywords: Innovation; Growth; Knowledge; Performance; Competition. (search for similar items in EconPapers)
JEL-codes: O14 O33 O40 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2006-08, Revised 2006-09
New Economics Papers: this item is included in nep-bec, nep-cbe, nep-eff, nep-ent, nep-ino and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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