Professor Stephen Roper

Director - ERC

Steve is Director of the Centre and Professor of Enterprise at Warwick Business School (WBS). His research interests include innovation, enterprise growth and development, regional development, and industrial policy evaluation.

Biography

Professor Stephen Roper joined Warwick Business School in the Entrepreneurship and Innovation Group in January 2008. Prior to this Steve was Professor of Business Innovation at Aston Business School and before that he was Assistant Director of the Northern Ireland Economic Research Centre, Belfast. Stephen holds a BA (hons) in Economics from the University of Durham, an MPhil in Economics from Oxford University and a PhD in Economics from the London School of Economics (LSE).

He published his first paper on small business growth in 1997 and has subsequently published 12 papers on this theme in 3* and 4* journals. He has been CI and PI on a number of ESRC projects on the theme of innovation, most recently focussing on the innovation value chain and open innovation. He is also one of the lead partners in the ERSC funded EREBUS Capacity Building Cluster which focuses on knowledge co-production with SMEs. Stephen has led over 50 externally funded research projects, ran his own consultancy company for some years, and works regularly with OECD on consultancy assignments relating to small business policy and evaluation. He has also consulted for a range of other private sector and policy organisations. Until the abolition of the RDA’s, Stephen was a member of the Advantage West Midlands Enterprise Board and led the regional sub-group on data and strategy. Stephen’s recent work with GE Capital on the UK mid-market has been widely reported (Summer 2012). He is a Consulting Editor of the International Small Business Journal and a Fellow of the RSA.

Research Paper

Home Alone: Innovation and sales growth intentions among the sole self-employed. Research Paper No 59

It is widely known that solo self-employed entrepreneurs enjoy non-pecuniary benefits from their employment status and earn less compared to those employed. They have greater ‘freedom and autonomy’ in running their business and as such they pursue their intrinsic commercial ambitions relying on their experience, abilities and exploiting the available opportunities from their external environment. In this paper we argue that solo self-employed entrepreneurs’ growth ambitions shape their future innovation strategy. We develop a theoretical framework and empirically analyse the relationship and the determinants of innovation and growth intentions using a large sample of UK self-employed entrepreneurs. In doing so we extend the theory of planned behaviour to incorporate the role of entrepreneurs’ past experience in innovation and growth in shaping their corresponding future intentions. Our empirical results suggest that past innovation performance and achieved growth rates shape future entrepreneurial intentions and ambitions through an adaptive learning process given the level of entrepreneurial capabilities and external environment opportunities.

Associated Themes
  • Innovation and Exporting
Research Paper

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

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
  • Innovation and Exporting
Research Paper

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

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
Research Paper

The effectiveness of regional, national and EU support for innovation in the UK and Spain. Research Paper No 52

Innovation policy aims to stimulate innovation and hence firm-level productivity and growth. Here, we use data from the national innovation panel surveys in the UK and Spain over the 2004 to 2012 period to explore the effectiveness of regional, national and EU innovation support in promoting the extent of innovation activity, its novelty, and market success. Allowing for potential selection effects, our results suggest that regionalised support is most influential in increasing the probability of undertaking both process and organisational innovations. For both the UK and Spain, national innovation support is associated with a higher probability of product or service innovation, and the degree of novelty of product or service innovations. In terms of innovation success (sales) we see a rather different pattern in the UK and Spain. In the UK only regionalised support is associated with increased innovative sales. In Spain, innovative sales are influenced by both regional, national and EU support measures. Our results suggest that moves towards more centralised innovation policy in the UK since 2012 may reinforce a focus on leading edge, novel product and service innovation while placing less emphasis on broadly based process and organizational innovation.

Associated Themes
  • Innovation and Exporting
Research Paper

Market failures in open innovation: implications and policy responses

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
Research Paper

Work organization and innovation in legal services: analysis from a ‘deep dive’ study. Research Paper No 45

Despite its potential social and economic benefit, innovation in legal services has to date received little academic attention. Drawing on the largest survey of legal services innovation ever undertaken (c. 1500 firms) this paper explores the strategic, resource and environmental drivers of service and delivery innovation among solicitors, barristers and other legal service providers.

Associated Themes
  • Innovation and Exporting
Research Paper

Absorptive capacity and ambidexterity in R&D: linking technology alliance diversity and firm innovation. Research Paper No. 42

The aim of this study is to examine how firms realize the benefits associated with a diverse range of technology alliances. We propose and test the hypothesis that firms’ knowledge combination capabilities mediate the relationship between technology alliance diversity innovation. Using panel data for Spanish manufacturing companies during the period 2004-2011, we provide evidence that firms’ absorptive capacity and ambidexterity in R&D serve as mediating mechanisms between technology alliance diversity and innovative performance Our study advances the literature on technology alliances by showing how firms use their portfolios of technology alliances to form their combination capabilities, and subsequently, to enhance innovation outcomes.

Associated Themes
  • Innovation and Exporting
Research Paper

The roles and effectiveness of design in new product development: a study of Irish manufacturers. Research Paper No. 41

Investments in design can make a significant contribution to successful new product development (NPD). However, there is insufficient evidence on the most appropriate or effective role that design could play. Previous case-based research has identified alternative roles for designers in NPD, but there is only tentative evidence over such roles’ contribution to NPD outcomes. Using data on a large sample (c. 1300) of Irish manufacturing plants we are able to examine the effectiveness of three different levels of involvement of designers in NPD and their impact on NPD novelty and success.

Associated Themes
  • Innovation and Exporting
Research Paper

Local and firm-level influences on innovation performance: linkages, climate and externalities. Research Paper No. 40

Interest in the local dimension of economic development has intensified in recent years with changes in the English policy landscape emphasising local policy action. In this paper we use an augmented version of the UK Innovation Surveys 4-7 to explore firm-level and local area influences on firms’ innovation performance.

Associated Themes
  • Innovation and Exporting
Research Paper

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

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
  • Innovation and Exporting
Research Paper

Firms’ innovation objectives and knowledge acquisition strategies: a comparative analysis . Research paper No 38

External partnerships play an important role in firms’ acquisition of the knowledge inputs to innovation. Such partnerships may be interactive – involving exploration and mutual learning by both parties – or non-interactive – involving exploitative activity and learning by only one party. Examples of non-interactive partnerships are copying or imitation. Here, we consider how firms’ innovation objectives influence their choice of interactive and/or non-interactive connections. We conduct a comparative analysis for the economies of Spain and the UK, which have contrasting innovation eco-systems and regulation burdens

Associated Themes
  • Innovation and Exporting
Research Paper

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

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
Research Paper

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

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
  • Innovation and Exporting
Research Paper

Innovation, quality management and learning: a dynamic analysis. Research Paper No 30

ERC Research paper No 30
Quality improvement and innovation are central strategies for firms in an increasingly globalised marketplace. Implementing both quality improvement and innovation, however, poses significant managerial, organisational and technical challenges and may also involve significant lags before benefits are realised. Here, using panel data on a large group of Irish manufacturing firms and econometric analysis, we establish the dynamic influence of firms’ adoption of quality improvement methods (QIMs) on firms’ innovation performance. Our study highlights the short-term disruptive and longer-term beneficial effects of QIM adoption on innovation.

Associated Themes
  • Innovation and Exporting
Research Paper

Creating value from embodied knowledge – the link between advanced manufacturing technologies and innovation. Research Paper No 31

Research paper No 31
The ability to innovate successfully is a key corporate capability, depending strongly on firms’ access to knowledge capital: proprietary, tacit and embodied. Here, we focus on one specific source of embodied knowledge – advanced manufacturing technologies or AMTs – and consider its impact on firms’ innovation success.

Associated Themes
  • Innovation and Exporting
Research Paper

Experience, age and exporting performance in UK SMEs. Research Paper No.28

It has often been argued that smaller firms face particularly strong resource constraints in developing an international market profile. Here we consider the determinants of SMEs exporting using a survey of internationally engaged UK SMEs. We first develop a theoretical model incorporating organisational and prior managerial learning effects. Our empirical analysis then allows us to separately identify the positive effects on exporting from the international experience of the firm and the negative effects of firm age. Positive exporting effects also result from grafted knowledge – acquired by the recruitment of management with prior international experience. Innovation also has positive exporting effects with more radical new-to-the-industry innovation most strongly linked to inter-regional exports; new-to-the-firm innovation is more strongly linked to intra-regional trade. Early internationalisation is also linked positively to the number of countries to which firms export and the intensity of their export activity. We find no evidence, however, relating early internationalisation to extra-regional exporting providing further evidence that firms tend be ‘born regional’ rather than ‘born global’. Implications for policy and practice are discussed.

Associated Themes
  • Innovation and Exporting
Research Paper

Firms’ innovation objectives and knowledge acquisition strategies. Research Paper No 27

External partnerships play an important role in firms’ acquisition of the knowledge inputs to innovation. Such partnerships may be interactive – involving exploration and mutual learning by both parties – or non-interactive – involving exploitative activity and learning by only one party. Examples of non-interactive partnerships are copying or imitation. Here, we consider how firms’ innovation objectives influence their choice of interactive and/or non-interactive connections. Four empirical results emerge. First, we find strong and consistent support for complementarity between non-interactive and interactive connections across firms in all sectors and sizebands. Second, we find that innovation objectives related to new products and services are linked only to non-interactive connections. Third, we find tentative evidence that where firms have innovation objectives which relate to product or service improvement they are more likely to establish non-interactive rather than interactive connections. Fourth, the extent of firms’ interactive and non-interactive connections are strongly related firms’ human capital endowments. These latter results suggest interesting second-order innovation effects from human capital improvements.

Associated Themes
  • Innovation and Exporting
Insight

LEP Innovation Benchmarks 2002. 2010

The UK Innovation Survey provides information on product/service and process innovation as well as the barriers to innovation activity for a relatively large number of UK firms.
In this paper we present the first local economic area analysis of this data derived from four surveys covering the 2002-04, 2004-06, 2006-08 and 2008-10 periods.

Associated Themes
  • Innovation and Exporting
Research Paper

The legacy of public subsidies for innovation: input, output and behavioural additionality effects

The Legacy of Public Subsidies for Innovation

Associated Themes
  • Innovation and Exporting
Research Paper

Knowledge context, learning and innovation: an integrating framework. Enterprise Research Centre ( ERC ) Research Paper No 20

Knowledge context, learning and innovation: an integrating framework. Enterprise Research Centre ( ERC ) Research Paper No 20
In this paper we develop a framework to identify those elements of firms’ knowledge context which are important for innovation, and the mechanisms through which that knowledge impacts on firms’ innovation performance. We make four main contributions to the existing literature. First, our characterisation of knowledge context provides the basis for a more specific identification of which elements of firms’ knowledge environment are important for innovation, discriminating between spatial, industrial and network influences. Second, we reflect the role of innovation ambition in shaping firms’ knowledge search strategies. Third, we differentiate between firms’ interactive and non-interactive knowledge search activities and recognise that these may be complemented by unanticipated and serendipitous knowledge spillovers. Finally, we introduce the notion of encoding capacity to reflect firms’ internal ability to assimilate and apply external knowledge. Our framework provides an integrating mechanism for existing empirical studies, suggests a number of new research directions related to the determinants of innovation performance and the heterogeneity of innovation outcomes.

Associated Themes
  • Innovation and Exporting
White Paper

Small firm-large firm Relationships

Small firm-large firm relationships and the implications for small firm innovation: what do we know?

Associated Themes
  • Innovation and Exporting
Insight

Growing Global – Moving Up the Exporting Ladder

Much has been done to support SME exporting in the UK in recent years. Only around a quarter of UK SMEs currently export, however, and a very small group - only 6 per cent of SMEs - currently export more than 50 per cent of their sales. For a very significant proportion of UK SMEs, therefore, the potential opportunities provided by exporting remain unexploited. Who are these SMEs? This question is important if we are to effectively target support and enable these firms to reap the growth benefits of exporting. ERC research helps to identify some markers of export potential which should allow more effective profile-led marketing of export support.

Associated Themes
  • Innovation and Exporting
Research Paper

Unpacking open innovation .Research Paper No 19

We explore the relationship between two key aspects of open innovation in small firms – absorptive capacity and external relationships – and their effects on growth in the US and European biopharmaceutical sectors. Results from an international sample of 349 biopharmaceutical firms surveyed in the US, UK, France and Germany suggest that realized absorptive capacity plays an important role in determining firms’ growth. In terms of the interaction between firms’ absorptive capacity and external relationships, we find that engagement with exploratory relationships depends strongly on the continuity of R&D, while participation in exploitative relationships is more conditional on firms’ realized absorptive capacity.

Associated Themes
  • Innovation and Exporting
Insight

Innovation or imitation: Which boosts growth in recession?

Innovation or imitation which leads to faster growth? Innovation – introducing products or services which are new to the market – may yield first mover advantages. Imitation – introducing new to the firm but not new to the market products or services is a safer, more conservative strategy. Drawing on data from UK innovation surveys, Stephen Roper, Director of ERC identifies some key trends

Associated Themes
  • Innovation and Exporting
Research Paper

Innovation, Innovation Strategy and Survival. Research Paper No 17

Innovation has a recognised effect on survival. Undertaking more risky innovation may increase the risk of business failure, while incremental innovation may reduce the risk. This paper investigates how firms’ innovation strategy choices affect the relationship between innovation and firm survival. The research suggests the notion of “survival additionality”, i.e. firms receiving public support derive more persistent benefits from innovation than firms which did not receive public support.

Associated Themes
  • Innovation and Exporting
Research Paper

Openness and Innovation Performance: Are Small Firms Different? Research Paper No 12.

Traditionally, literature on open innovation ( the number of links a firm has to customers, suppliers and other firms) has concentrated on analysis of larger firms. This paper explores if and how the benefits of openness in innovation are different for small firms compared to medium and large ones. It suggests that small firms can benefit disproportionately from adopting open innovation approaches but that they reach the benefits of this approach at lower levels than medium and larger firms making the choice of innovation partner critical.

Associated Themes
  • Innovation and Exporting
Insight

UK Mid-Market – ‘Overlooked Middle’ or Lair of the Hidden Champions?

This paper highlights two alternative views of the UK mid-market. The ‘overlooked middle’ perspective emphasises that UK economic policy in relation to Medium Sized Businesses (MSBs) has been symbolic rather than substantive, lacking scale and consistency. The 'Hidden Champions' perspective recognises the rapid growth of leading MSBs and the lack of acknowledgement they receive in the UK.

Associated Themes
  • Innovation and Exporting
White Paper

Supporting Sustained Growth Among SMEs. White Paper No 7.

Among SMEs high growth is often episodic and not sustained. This paper reviews a number of international support measures designed to give SMEs the capabilities and resources to sustain fast growth.

Associated Themes
  • Business Demography Research Theme
  • Innovation and Exporting
Insight

Gearing up for Growth Vouchers

This paper suggests some key lessons for the Growth Vouchers scheme based on the experience of the Nesta Creative Credits Project.

Associated Themes
  • Innovation and Exporting
Research Paper

Paradigm Shift or Business as Usual? Research Paper No 6.

This paper explores the claims of a ‘paradigm shift’ towards firms using open innovation as a conscious strategic choice.

Associated Themes
  • Innovation and Exporting
Research Paper

An Experimental Approach to Industrial Policy Evaluation: the Case of Creative Credits. Research Paper No 4.

This paper considers the arguments for applying experimental methods to industrial policy measures and proposes an experimental policy evaluation approach

Associated Themes
  • Innovation and Exporting
White Paper

SME Innovation, Exporting and Growth. White Paper No 5.

SMEs which have a track record of innovation are more likely to export, export successfully and generate growth from exporting than non-innovating firms. This paper explores the existing evidence.

Associated Themes
  • Innovation and Exporting