Software Development and Innovation ‒ Exploring the Software Shift in Innovation in Swedish Firms

Martin Andersson, Anna Kusetogullari () and Joakim Wernberg ()
Additional contact information
Joakim Wernberg: Swedish Entrepreneurship Forum

No 1347, Working Paper Series from Research Institute of Industrial Economics

Abstract: Several scholars as well as industry professionals have claimed that there is a “software-biased shift” in the nature and direction of innovation in that software development is a core part of innovation activities in firms across a wide array of industries. Empirical firm-level evidence of such a shift is still scant. We employ new and unique firm-level survey data on the frequency and nature of software development among firms in Sweden, matched with the Community Innovation Survey (CIS). We find robust evidence supporting a software-bias in innovation in that software development is associated with a higher likelihood of introducing innovations as well as higher innovation sales among firms in both manufacturing and services industries. Furthermore, this positive relationship is stronger for firms employing in-house software developers than for those that only use external developers, suggesting that there is a hierarchy but possibly also a complementarity between internal and external software development. We also find support for complementarity between software-based technology and human capital; the estimated marginal effect of software development on innovation is particularly strong for firms that combine in-house software development with a highly educated workforce in STEM as well as in other disciplines.

Keywords: Innovation; Software; Software development; Digitalization; Human capital; Software bias; Digital technology; Absorptive capacity (search for similar items in EconPapers)
JEL-codes: L25 O15 O32 O33 O43 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2020-06-30
New Economics Papers: this item is included in nep-bec, nep-cse, nep-eur, nep-ind, nep-ino, nep-sbm and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.ifn.se/wfiles/wp/wp1347.pdf Full text (application/pdf)

Related works:
Journal Article: Software development and innovation: Exploring the software shift in innovation in Swedish firms (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:1347

Access Statistics for this paper

More papers in Working Paper Series from Research Institute of Industrial Economics Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by Elisabeth Gustafsson ().