Individual Incentives as Drivers of Innovative Processes and Performance - Executive Summary

Abstract

Drawing on research in economics and social psychology and using survey data from over 10,000 scientists and engineers (SESTAT 2003), I examine the relationships between individuals' pecuniary and nonpecuniary motives and incentives, innovative effort, and innovative performance in firms. I find that individuals' motives, in particular intrinsic motives such as intellectual challenge, are important drivers of innovative outcomes. I also investigate differences in motives, effort and performance between startups and established firms. While extrinsic motives differ across firm types, intrinsic motives are surprisingly similar. The existing differences in motives explain only a limited amount of the observed significant effort and performance differences in startups versus established firms.

Keywords: economics, social, psychology, pecuniary, nonpecuniary, innovative, motives, firm