Non-Technological and Technological Innovation: Strange Bedfellows?

50 Pages Posted: 11 Sep 2007 Last revised: 26 Aug 2008

See all articles by Tobias Schmidt

Tobias Schmidt

Deutsche Bundesbank - Research Center

Christian Rammer

ZEW – Leibniz Centre for European Economic Research - Industrial Economics and International Management Research

Date Written: 2007

Abstract

Non-technological innovation is an important element of firms' innovation activities that both supplement and complement technological innovation, i.e. the introduction of new products and new processes. We analyse the spread of nontechnological innovation in firms, their relation to technological innovation, and their effects to firm performance and success with product and process innovation, using data from the German Community Innovation Survey conducted in 2005 (German CIS 4). Non-technological innovation is defined as the introduction of new organisational methods or the introduction of new marketing methods. We find that the determinants of a firm's propensity to introduce technological and non-technological innovations are very similar and that both types are closely related. There are only small effects of nontechnological innovation on a firm's profit margin, which contrasts the strong effects to be found from technological innovation. However, non-technological innovation spurs success with product and process innovation terms of sales with market novelties and cost reductions from new processes.

Keywords: organisational innovation, marketing innovation, effects of innovation, CIS 4

JEL Classification: O31, O30, L25

Suggested Citation

Schmidt, Tobias and Rammer, Christian, Non-Technological and Technological Innovation: Strange Bedfellows? (2007). ZEW - Centre for European Economic Research Discussion Paper No. 07-052. Available at SSRN: https://ssrn.com/abstract=1010301 or http://dx.doi.org/10.2139/ssrn.1010301

Tobias Schmidt (Contact Author)

Deutsche Bundesbank - Research Center ( email )

Wilhelm-Epstein-Str. 14
Frankfurt/Main, 60431
Germany

Christian Rammer

ZEW – Leibniz Centre for European Economic Research - Industrial Economics and International Management Research ( email )

P.O. Box 10 34 43
L 7,1 D-68161 Mannheim
Germany

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