Abstract:

 Research and development policy has become one of the main priorities of European Union countries through the Lisbon strategy, aiming at stimulating national R&D investments in order to reach the “fatidic” 3% level of GDP. Numerous studies have used R&D expenditures as a measure for firms’ innovative capacity. While emphasizing innovation inputs and support instruments, these works did not take into account complementary innovation strategies such as marketing or organizational innovations undertaken by the firm. The theoretical literature on innovation highlights nevertheless the feedback character of innovation processes where non-technological activities play a crucial role. Therefore, the purpose of this paper is to highlight the effects of complementary innovation strategies (organizational and marketing innovations) on firms’ technological innovation (propensity to innovate and innovative performance). We test our hypotheses on the sample of the 555 Luxembourg’s firms which responded to the 4th Community Innovation Survey (CIS) in 2006.
The results strongly highlight the importance of marketing innovations as a complementary innovation activity for both the propensity to innovate and the innovative performance. This is in line with the idea that firms focusing attention on marketing initiatives are likely to have a better ability to increase customer satisfaction in comparison to competitors, to adapt successfully to changing market needs, to discover and exploit business ideas and to access new information and resources for developing new competitive products or processes - which in turn enhance their capacity to innovate. In contrast, results show that organizational innovation that firms introduced enhances only their propensity to innovate, not their innovative performance. Another important result indicates that firms engaging in knowledge management are likely to have higher ability to innovate. This tends to indicate that knowledge management strategies are associated with more flexibility, adaptability, competitive advantage and better organizational performance. The results also showed that cooperation with customers has a positive impact on performance. This is consistent with previous literature arguing that external relations with customers constitute internal organizational competencies that are crucial for firms’ performance. Overall, the paper shows that while the importance role of R&D expenditures (intramural and/or extramural) in enhancing innovative capacity and performance is largely acknowledged, other complementary strategies may be also crucial for firms’ competitiveness. The results offer some clues for policy-makers in order to favor non-technological innovations within the firm.