The Role Of Extramural R&D And Scientific Knowledge In Creating High Novelty Innovations: An Examination Of Manufacturing And Service Firms In Spain

• Published in: Research policy Vol. 49; no. 8; p. 104030
• Main Authors: Gómez, Jaime, Salazar, Idana, Vargas, Pilar
• Format: Journal Article
• Language: English
• Published: Elsevier B.V 01.10.2020
• Subjects: Extramural R&D; High novelty Innovation; High-novelty products; Low-novelty products; Open innovation; Scientific sources of knowledge; Extramural R&D; O36; L80; L60; High novelty Innovation; Scientific sources of knowledge; Open innovation; Low-novelty products; O31; High-novelty products; O32
• ISSN: 0048-7333; 1873-7625
• DOI: 10.1016/j.respol.2020.104030

•We examine the effect of extramural R&D and scientific knowledge on product innovation.•Extramural R&D is more relevant for high novelty than for low novelty innovations.•Scientific knowledge is more critical for high novelty innovation than for low novelty innovation.•Non-scientific knowledge is more beneficial than scientific knowledge, no matter the nature of the innovation.•The risks of excessively relying on extramural R&D are high. This paper studies the effect of extramural R&D and of scientific knowledge in the creation of high novelty innovations. We first argue that extramural R&D brings in higher benefits, but also higher costs, when trying to obtain high novelty vs. low novelty innovations. Second, we propose that extramural investments in scientific R&D allow the firm to access distant knowledge and to break the path dependence induced by its resource endowments. However, investments in scientific R&D are also subject to the risks of the ‘two worlds’ that result from the collaboration of firms and universities and research centres. Our hypotheses are tested with data from the Panel of Technological Innovation, which describes the innovative activities of Spanish firms from 2005 to 2013. Our results show an inverted U-shaped relationship between extramural R&D and the share of sales from new products. They also reveal that extramural R&D investments increase the proportion of sales from high novelty products more than from low novelty products (a 21% vs. a 2%). However, an excessive reliance on extramural R&D reduces more the sales from high novelty innovations than from low novelty innovations (a 52% vs. a 32%). Finally, extramural R&D performed by universities and research centres raises the share of sales from high novelty innovations. However, collaboration with non-scientific sources is more impactful than collaboration with scientific ones, no matter the nature of the innovation considered.