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1 – 10 of over 8000Innovation projects are often risky and costly. But not all innovation projects lead to commercialisation; some are abandoned, and these abandoned innovation projects can be…
Abstract
Purpose
Innovation projects are often risky and costly. But not all innovation projects lead to commercialisation; some are abandoned, and these abandoned innovation projects can be classified as a waste of resources. Therefore, this paper studies the influence of different external sources and a firm’s decision to abandon an innovation project. The purpose of this paper is to provide a broader understanding of abandoned projects.
Design/methodology/approach
The data applied are quantitative data and the empirical background is the Danish Innovation Survey 2009. The sample consists of Danish manufacturing firms with ten employees or more (n=840). The results are based on logistic regression analysis.
Findings
Results reveal that firms should consider that the involvement of customers can lead them to abandon innovation projects. However, if firms combine customers with universities, it will decrease the likelihood of innovation projects being abandoned. A more in-depth analysis shows that the involvement of customers from “Europe” (countries in Europe excluding Denmark) and the “US” leads to innovation projects being abandoned while customers from “other countries” (the rest of the world, including China and India) have the opposite effect.
Originality/value
The contribution is to the limited literature on abandoned innovation projects by suggesting that the type of external sources is a significant factor in firms’ decisions to abandon innovation projects. The paper identifies that the involvement of certain external sources leads firms to decide to abandon innovation projects, and that the country of origin of the external sources is an important criterion to consider in relation to a firm’s decision to abandon innovation projects.
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Filipe AP Duarte, Maria Jose Madeira, Dulcineia Catarina Moura, Joao Carvalho and Jacinta Raquel Miguel Moreira
This paper aims to analyses barriers as a determinant of ongoing or abandoned innovation activities. The literature exploits barriers as the nature of innovation and its influence…
Abstract
Purpose
This paper aims to analyses barriers as a determinant of ongoing or abandoned innovation activities. The literature exploits barriers as the nature of innovation and its influence on firm’s. The main focus is the Portuguese SMEs and the impacts that act as barriers in the development of innovation activities.
Design/methodology/approach
The database was obtained through the Community Innovation Survey 2010 (CIS 2010) that was coordinated by EUROSTAT. In this sense, a logistic regression model is proposed, which makes it possible to analyse the relations between three or more variables, depending on whether the relationship is one of dependence or interdependence, thus allowing the application of distinct statistical techniques, using 6,160 firms
Findings
There are several sources of information that are associated with the development of innovation projects.
Practical implications
The importance of barriers to the development of innovation activities, as well as it being a decisive factor in the impediment to and abandon of the same, was noted.
Originality/value
This study also demonstrated that each case is different and that a barrier in one firm can at the same time be a window of opportunity for another firm.
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Filipe A.P. Duarte, Maria José Madeira, Susana Maria Fonseca, Dulcineia Catarina Moura and Ana Teresa Bernardo Guia
The purpose of this paper is to explore the effects of R&D investment as a determinant of ongoing or abandoned innovation activities. The literature review focuses especially…
Abstract
Purpose
The purpose of this paper is to explore the effects of R&D investment as a determinant of ongoing or abandoned innovation activities. The literature review focuses especially small and medium-sized enterprises (SMEs) that deploy R&D investment as a way of developing innovation processes.
Design/methodology/approach
This study’s design used a sample of 4,229 Portuguese SMEs to analyse the effects R&D investment has on the innovation activities; the results obtained demonstrate the great importance of firms investing in R&D internal activities for the development of their innovation process.
Findings
The most important findings highlight the types of activities that emerge as relevant to innovation processes susceptible for development to avoid abandoning and maintaining ongoing innovation activities. Among them, the authors would highlight the design of products or services, the introduction of innovations to the market and the acquisition of machinery, equipment and specific software, among others.
Originality/value
In addition, other types of activities emerge as relevant to innovation processes susceptible for development to avoid abandoning and maintaining ongoing innovation activities. This research adds value to the current literature mainly showing several determinants related to R&D, which could be used by SMEs to improve and develop their activities of innovation.
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Javier Ortiz and Vicente Salas-Fumás
With Spanish Community Innovation Survey data, this paper tests two main hypotheses as explanation of the fall in business innovation output in the Great Recession: the aggregate…
Abstract
Purpose
With Spanish Community Innovation Survey data, this paper tests two main hypotheses as explanation of the fall in business innovation output in the Great Recession: the aggregate demand effect (firms have lower propensity to initiate innovation projects in recession than in contraction from demand-pull and profit expectations effects) and the risk effect (a greater proportion of the initiated projects fail in recessions than in expansions).
Design/methodology/approach
The research methodology consists on first modelling the decision by firms to initiate innovation projects in t or not (probit model), and, second, modelling the outcomes, success or failure in t + 1 of firms that decide to initiate (Heckman model).
Findings
The empirical results support the two hypotheses. They also indicate that the sensitivity of the decision to initiate innovation projects to the aggregate demand is more pronounced among financially constrained firms than among unconstrained ones, while the risk effect appears to be independent of the financial situation of firms.
Research limitations/implications
The results of the research are limited by not being able to follow up individual innovation projects, and by not having available a more representative sample of firms where non-innovators and potential innovators are represented (now is biased toward potential innovators).
Practical implications
The results highlight the importance of macroeconomic stability for sustained business innovation output over time and calls managers’ attention in better management of innovation risk.
Social implications
The results of the paper recommend macroeconomic polies aimed at the stabilization of aggregate demand and smoothing the business cycle, as a way to contribute to the stabilization of the growth of innovation output over time. Monetary and fiscal policies that smooth the business cycle will then have significant effects in the stabilization of innovation output and, in turn, in the reduction of volatility of economic growth over time. Increasing the direct public financial aid to undertake innovation projects in recession periods will not have the same innovation output stabilization effect than the stabilization of the aggregate demand. The reason is that, as the paper points out, the innovation output of financially unconstrained firms is also affected negatively by the contraction of aggregate demand in recession periods.
Originality/value
This paper is the first one to investigate the differences in business innovation outputs in expansions and recessions, separating the aggregate demand and the risk effect that the organisation for economic co-operation and development identifies as main determinants of the fall in innovation output during the Great Recession. The decomposition of firms’ innovation output in the decision to initiate innovation projects and the likelihood that those initiated succeed is also new in the literature.
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Hadi Sarvari, Matteo Cristofaro, Daniel W.M. Chan, Norhazilan Md. Noor and Mohammadreza Amini
Completion of abandoned public facility projects is one of the major concerns of governments struggling with budget issues. Various research studies have shown that this can only…
Abstract
Purpose
Completion of abandoned public facility projects is one of the major concerns of governments struggling with budget issues. Various research studies have shown that this can only be solved with the help of the private sector. Therefore, this study aims to investigate the capacity of the private sector to complete abandoned public facility projects through the study of the Water and Wastewater Company in Iran.
Design/methodology/approach
The Delphi survey questionnaires, which were distributed to and responded by a panel of experts – i.e. three groups of employers of the Iranian Water and Wastewater Company, consulting agents and private sector stakeholders engaging with Water and Wastewater Company projects – identified 50 critical factors allowing the private sector to carry out abandoned facility projects. These have been categorized into four components: financial capacities, management competency, knowledge and expertise and resources and facilities. A descriptive survey method was used to determine and prioritize these factors.
Findings
The survey findings indicate that knowledge and expertise are the main important clusters of factors influencing the completion of abandoned public facility projects. The value of these results is essential in providing the sound basis for mutual trust between the private sector and the public sector for greater participation, thereby helping to complete abandoned public facility projects.
Originality/value
To the best of the authors’ knowledge, this is the first study attempting to investigate the capacity of the private sector to complete abandoned public facility projects through an empirical analysis of factors influencing their completion.
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Vanessa Pertuz and Luis Francisco Miranda
The purpose of this study is to investigate the factors that impede innovation in Colombian manufacturing firms, as measured by the level of technological intensity.
Abstract
Purpose
The purpose of this study is to investigate the factors that impede innovation in Colombian manufacturing firms, as measured by the level of technological intensity.
Design/methodology/approach
The authors used data from 1,850 firms to determine the barriers associated with information and internal capabilities, risks and environment.
Findings
The main results of this study confirm that potentially innovative firms of low technological intensity are more likely to ascribe high importance to obstacles associated with information and internal capabilities, when compared with innovative firms. The abandonment of innovative projects, family-operated enterprises and investment in R&D are all related to an increased perception of obstacles to innovation, while investments in information and communication technologies have an opposite effect. Variables as partnerships and export behaviour, have different effects depending on the level of technological intensity.
Originality/value
This study investigates the obstacles to innovation of a firm as determined by its characteristics and as measured against its level of technological intensity. Previous studies have investigated barriers to innovation in technologically advanced sectors (Lachman and López, 2019) and technology-based SMEs (De Moraes Silva et al. 2020) or how the technological intensity of the firm determines access to university knowledge for overcoming barriers (Kanama and Nishikawa, 2017). The only study to analyse barriers to innovation by measuring a firm’s technological intensity was conducted into Mexican manufacturing and services sector companies by Santiago et al. (2017).
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John Bowers and Alireza Khorakian
While innovation has many similarities to other forms of projects it is characterised by a high failure rate and the need to stimulate creativity. More explicit risk management…
Abstract
Purpose
While innovation has many similarities to other forms of projects it is characterised by a high failure rate and the need to stimulate creativity. More explicit risk management could help in achieving success in innovation projects. However, too much or inappropriate risk management might stifle the creativity that is core to innovation. So, what project risk management should be applied and where in the innovation project?
Design/methodology/approach
A theoretical framework is proposed which combines the generic innovation process with project risk management. The framework was used to analyse the current attitudes to managing innovation risk in a series of companies.
Findings
The decision points of the stage-gate innovation process model provide an effective interface for incorporating project risk concepts. The general concepts appear most relevant to innovation management though it is useful to customise them to emphasise the particular characteristics of innovation projects. The experience of using the resultant combined model in a number of diverse case studies indicates the relevance of the model in understanding attitudes towards risk management in innovation. The analysis of the case study companies suggested that risk management needs to be applied in differential manner: simple, unobtrusive techniques early in the innovation life cycle with more substantial, quantitative methods being considered for later stages.
Research limitations/implications
It would be useful to extend this research by examining more case studies from other countries and industries.
Practical implications
The combined innovation and risk management model provides a framework that diverse companies can appreciate. The framework offers a basis for discussing the most appropriate form of risk management in different innovation-based industries.
Originality/value
Although there are many separate models for innovation and project risk management described in the literature, there is very little discussion about explicitly combining these theories. This paper aims to help fill this gap in the knowledge.
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Marco Greco, Serena Strazzullo, Livio Cricelli, Michele Grimaldi and Benito Mignacca
Despite the multiple calls for research on the dark side of open innovation, very few studies have approached the topic so far. This study aims to analyse successful and…
Abstract
Purpose
Despite the multiple calls for research on the dark side of open innovation, very few studies have approached the topic so far. This study aims to analyse successful and unsuccessful open innovation projects.
Design/methodology/approach
This study uses thematic analysis to describe the factors determining their (un)success. The researchers interviewed 27 managers and owners in the manufacturing sector. Then, the respondents were asked to discuss one successful and one unsuccessful open innovation project to explore the differences in triggers and setbacks, focusing on the causes that determined the failures.
Findings
Findings show that many interviewees are reluctant to identify failure cases, which somewhat explains the paucity of studies on the topic, and others do so when the failure is recognised by a third party (such as a public institution not granting funds to the project). This study discussed how this phenomenon is linked with the paradoxical relation between innovation success and failure. It is also found that triggers and setbacks determining the project's (un)success are markedly differently based on the technological intensity of the firm. Implications for scholars and practitioners are also drawn.
Originality/value
This study provides a balanced view between open innovation successes and failures to offer informative recommendations to practitioners. Furthermore, it contributes to filling the scarcity of studies related to risks and failures of open innovation projects. This gap has been addressed by studying the factors that determine the success and unsuccess of an open innovation project.
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Abstract
Purpose
This study aims to explore the impact mechanism of the degree of innovation failure on breakthrough innovation in Chinese listed companies, and examines the moderating effect of the company’s own knowledge-based capabilities.
Design/methodology/approach
Based on organizational learning theory and using the innovation failure data of invention patents from Chinese A-share listed companies on the main board from 2003 to 2017 as research samples, this study constructs and examines a comprehensive framework and its impact on breakthrough innovation regarding “what kind of innovation failure will promote breakthrough innovation”, focusing on innovation failure, enterprise knowledge base, and breakthrough innovation.
Findings
Empirical research has found a U-shaped relationship between innovation failure and breakthrough innovation. In other words, both a low level of failure and an extremely high level of failure can significantly promote breakthrough innovation in enterprises. Furthermore, when the depth of enterprise knowledge is high, it further strengthens the non-linear relationship between innovation failure and breakthrough innovation.
Originality/value
The research results enrich the study of the failure predicament and breakthrough innovation of Chinese technology innovation enterprises, revealing effective paths for Chinese technology innovation enterprises to get rid of the passive situation of innovation failure, and providing theoretical support and practical reference for “breaking new ground and achieving breakthrough innovation”.
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Thomas Keil, Pasi Kuusela and Nils Stieglitz
How do organizations respond to negative feedback regarding their innovation activities? In this chapter, the authors reconcile contradictory predictions stemming from behavioral…
Abstract
How do organizations respond to negative feedback regarding their innovation activities? In this chapter, the authors reconcile contradictory predictions stemming from behavioral learning and from the escalation of commitment (EoC) perspectives regarding persistence under negative performance feedback. The authors core argument suggests that the seemingly contradictory psychological processes indicated by these two perspectives occur simultaneously in decision makers but that the design of organizational roles and reward systems affects their prevalence in decision-making tasks. Specifically, the authors argue that for decision makers responsible for an individual project, responses given to negative performance feedback regarding a project are dominated by self-justification and loss-avoidance mechanisms predicted by the EoC literature, while for decision makers responsible for a portfolio of projects, responses to negative performance regarding a project are dominated by an under-sampling of poorly performing alternatives that behavioral learning theory predicts. In addition to assigning decision-making authority to different organizational roles, organizational designers shape the strength of these mechanisms through the design of reward systems and specifically by setting more or less ambiguous goals, aspiration levels, time horizons of incentives provided, and levels of failure tolerance.
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