Innovation Pattern Heterogeneity: Data-Driven Retrieval of Firms’ Approaches to Innovation

Abstract

According to a strong and diversified theoretical framework, innovation is one of the usual suspects in defining differences in firm performance. Understanding the diversity that exists within the population of innovative firms is essential for developing appropriate innovation policies. Our study explored the diversity of innovation patterns among Norwegian firms included in the 2018 Community Innovation Survey (CIS2018). By applying factor analysis to a wide array of survey variables and a large sample of firms, we identified eleven typical approaches to innovation, which connect innovation inputs and outputs at the firm level. A main outcome of our study is a novel fine-grained view of innovation as a multifaceted concept. Our research path helps us to find commonalities in innovation behavior across industries and, as a consequence, to better isolate those innovation patterns that differentiate industries from one another. We also show the relation between firm size, on one hand, and each of the firm scores associated to the eleven typical approaches to innovation, on the other hand, thus uncovering ways in which small firms may survive in sectors dominated by large firms.