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    Innovation and performance in British-based manufacturing industries: shaping the policy agenda

    Frenz, Marion and Cox, H. (2002) Innovation and performance in British-based manufacturing industries: shaping the policy agenda. The Business Economist 33 (2), pp. 24-33. ISSN 0306-5049.

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    This paper analyses the relationship between business performance, R&D expenditures and innovation output. It utilises the second Community Innovation Survey (CIS2), a large-scale survey into firms’ innovation activities conducted in the UK by the DTI. We matched up CIS2 with performance data as derived from the FAME database, using the four year period after the survey. We find that many enterprises who claim to have produced innovation output, did not register any expenditures on formal R&D. Moreover, we find evidence that it is innovation output, the introduction of new or improved products and processes, which is correlated to productivity growth, not a high expenditure on R&D. The UK’s policy to support innovation via subsidising R&D expenditure may on the one hand fail to effectively target many firms who are successful innovators and on the other reward firms that engage in levels of R&D spending beyond the point where marginal social cost equals marginal social benefit. Our evidence strongly suggests that the key to supporting productivity growth in the economy as a whole is to develop policy initiatives that are able to facilitate product innovation directly.


    Item Type: Article
    School: Birkbeck Faculties and Schools > Faculty of Business and Law > Birkbeck Business School
    Research Centres and Institutes: Innovation Management Research, Birkbeck Centre for
    Depositing User: Administrator
    Date Deposited: 15 Aug 2013 14:55
    Last Modified: 02 Aug 2023 17:06


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