How do firms innovate?

21 december 2004

Policy makers attach great importance to innovation, especially since it is recognized as a key driver to long-term productivity growth. A recent debate is about whether sector-specific measures are needed to stimulate innovation in firms. This paper aims to classify groups of Dutch innovative SMEs with similar innovation patterns.

Our objective is to provide policy makers with a classification that:
- can serve as a basis for future policy interventions,
- makes possible a comparison between manufacturing and service firms,
- enables the comparison of the innovative behaviour of small (< 10 employees) and medium-sized (10-100 employees) enterprises.


Voor inlichtingen: 079 343 06 04

How do firms innovate?

09 december 2004

This paper classifies Dutch innovative SMEs into four clusters with similar innovation patterns: supplier-dominated, client-driven, science-based and input-intensive firms. The classification is compiled using some new indicators that are particularly relevant to innovation in SMEs. We used the firm level as unit of classification; a departure from previous taxonomic studies. Doing so enabled us to assess the heterogeneity of firms within a particular sector. Our results indicate that differences between manufacturing and services sectors should not be exaggerated. Besides, firms are very diverse in how they handle innovation processes.
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Auteur(s): dr. J.P.J. de Jong, dr. O. Marsili

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