Pathways to efficiency, pathways to growth: Evidence from the UK Innovation Survey. Research Paper No. 83

Published: 11 February 2020

Previous studies have suggested there is little correlation between efficiency – measured by sales per employee - and growth at firm level. Here, using data from successive waves of the UK innovation survey we consider two questions.
- Do different types of innovation have different effects on efficiency and growth?
- We consider whether the source of firms’ R&D finance matters.
Together our results suggest the importance of aligning innovation investments with broader corporate and policy objectives and the potential value of policy support for process innovation to achieve positive growth and efficiency outcomes.

Associated Themes

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  Innovation
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  Productivity and performance

Accessibility, utility and learning effects in university-business collaboration. Research Paper No 57.

Published: 7 March 2017

UK government reports have emphasised the potential role of universities in driving localised economic development. There may be a utility-accessibility trade-off, however, between the accessibility of local university knowledge and its ‘fit’ with the specific needs of local firms. Here, using data from UK Innovation Surveys (UKIS) covering the period 2004 to 2012, we examine this trade-off and how it differs for firms of different sizes. Our analysis suggests four main empirical results. First, we find support for the predicted inverted-U shape relationship between the distance between collaborators and the innovation benefits. Second, we find evidence, in accord with the utility/accessibility trade-off, that local university collaboration benefits only small and medium firms. Third, we find that learning effects from previous collaborations with customers, suppliers etc. increase the probability of collaborative activity. Fourth, we find strong evidence of the persistence of university collaborations. Our results re-affirm the evidence from other studies of the value of university collaboration and suggest the value of policy action to address market failures which arise in the formation of university-small business collaborations.

Associated Themes

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  Innovation

Does learning from prior collaboration help firms to overcome the “two worlds” paradox in university-business collaboration? Research Paper No 55

Published: 23 February 2017

There is now substantial evidence on the positive contribution universities can make to helping firms’ innovation. Building university-business collaborations, however, confronts the ‘two-worlds’ paradox, and the difference in institutional logics and priorities between businesses and universities. Here, we consider whether firms’ experience from prior collaboration can generate learning which can help to overcome the two-world’s paradox and improve their ability to generate new-to-the-market innovations in collaboration with universities. Based on panel data for UK companies, we find evidence of significant learning effects in the commercialisation pipeline for new-to-the market innovation. Firms working with, say, customers in one period are significantly more likely to collaborate with universities in subsequent periods. Further down the pipeline, collaborating with universities increases the probability of a firm making new-to-the-market innovations (as opposed to new-to-the-firm innovation) by 21-24 per cent regardless of firm size. The commercial benefits of collaborative, new-to-the-market innovation are concentrated in medium and larger firms with no significant effect for small companies. There is the potential for policy intervention both to increase levels of small business-university collaboration and assist smaller firms to maximise the commercial benefits of collaborative, new-to-the-market innovations.

Associated Themes

Market failures in open innovation: implications and policy responses. Research Paper No 49

Published: 2 November 2016

Open innovation provides significant advantages for individual firms and may generate wider social benefits. Positive externalities related to knowledge sharing may result from openness itself, and enhanced levels of innovation may lead to otherwise unachieved innovation spillovers. A number of studies have suggested, however, that average levels of OI activity remain well below the level which maximises innovation outputs. Here, we identify four market failures which arise in the process of OI partnership formation and which may be limiting firms OI engagement. Information failures occur which mean firms are unaware of the benefits of OI, lack information on the capabilities of partners and their trustworthiness. Appropriability issues may also mean that levels of OI remain below the social optimum. We develop policy responses to each market failure linked to the development of an OI intermediary and develop a related logic model.

Associated Themes

The legacy of public subsidies for innovation: input, output and behavioural additionality effects. Research Paper No 21

Published: 26 February 2016

In many countries significant amounts of public funding are devoted to supporting private firms’ R&D and innovation projects through subsidies or grants, loans, and other instruments such as loan guarantees or R&D tax credits. Our interest here is in exploring the mechanisms through which these positive effects occur and in evaluating the legacy effects of public subsidies for private innovation.

Associated Themes

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  Innovation

The marketization of higher education: A causal analysis of innovation in UK universities . Research Paper No 39

Published: 25 February 2016

Higher education is increasingly a marketised service sharing many characteristics with other professional services such as legal, medical or financial services. With marketization comes competition, and the need for HEIs to develop and maintain attractive undergraduate programmes to attract and retain strong faculty and fee-paying students. Here, we consider the drivers of programme innovation – the introduction of new programmes – and the withdrawal of existing programmes in UK universities. Using panel data for all UK universities provided by UCAS we identify significant resource, internationalisation and business engagement effects. Financial stringency encourages both programme innovation and withdrawal. More extensive international market engagement and research collaboration with business have similar effects increasing programme innovation. The results have both strategic and systemic implications.

Associated Themes

Investigating Schumpeter’s creative army: what drives new-to-the-market innovation in micro-enterprises? Research paper 36

Published: 28 September 2015

Schumpeterian arguments related to creative destruction place small, entrepreneurial firms at the centre of the innovation process. The exclusion of micro-enterprises (with less than 10 employees) from most innovation surveys means, however, that we know relatively little about innovation among this group of firms. Here, using new survey data on a thousand micro-enterprises we explore the determinants of new-to-the-market innovation, the basis for the Schumpeterian creative destruction (CD) process. Our results provide strong support for the interactive nature of micro-enterprise innovation and suggest the potential value of developing a model of interactive creative destruction (ICD). Our results also suggest that family-owned firms are more likely to introduce new-to-the-market innovations and therefore play an important role in the ICD process. In organisational terms, our analysis emphasises the range of technical and co-ordination capabilities required by micro-enterprises to innovate successfully. Policy implications relate to promoting awareness among micro-firms of the support available for innovation to reduce the impact of financial and risk constraints.

Associated Themes

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  Innovation

Profiling UK university spin-outs. Research Paper No 35

Published: 23 July 2015

This report presents the results of a comprehensive survey of UK university spin-out businesses.
In an effort to enhance our understanding of this sector, a database of 1044 active USOs was compiled from individual university records and internet searches, and matched to a published list of UK university spin-outs.Telephone interviews were conducted with USOs and a final sample of 350 was achieved. Non-response bias was tested for and weights were constructed to ensure that the findings were representative of the UK population of USOs.

Associated Themes

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  Innovation