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Innovation in firms, resilience and the economic downturn: Insights from CIS data in Portugal
Author(s) -
Pinto Hugo,
Pereira Tiago Santos,
Uyarra Elvira
Publication year - 2019
Publication title -
regional science policy and practice
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.342
H-Index - 8
ISSN - 1757-7802
DOI - 10.1111/rsp3.12243
Subject(s) - recession , product innovation , business , process (computing) , psychological resilience , product (mathematics) , resilience (materials science) , industrial organization , innovation process , new product development , innovation management , economic system , economics , marketing , work in process , macroeconomics , psychology , physics , geometry , mathematics , thermodynamics , computer science , psychotherapist , operating system
There is an interest in understanding the effect of economic crises such as the one that hit the financial markets in the late 2000s, on the innovation performance of countries and regions. This paper introduces the concept of “resilience of innovation” to illustrate how the economic slowdown affects firms' behaviour in terms of their ability to maintain and develop innovative activities and deploy product and process innovation. Using Portugal as a case study—an EU member‐state that was heavily affected by the economic downturn—this paper explores the data collected from four waves of the Community Innovation Survey from 2006 to 2012. It presents two‐stage limited dependent variable models to understand the changing impacts of structural factors, innovative activities and strategies in terms of exploration and exploitation of knowledge on the development of product and process innovation. We find knowledge exploration to be particularly important for product innovation, while exploitation is a strong determinant for process innovation. Size, market knowledge sources and public funding for innovation are positively associated with both types of innovation in the peak of the crisis. This reiterates the importance of innovation support efforts to mitigate the effects of economic shocks and boost recovery.