Incidence of Human Capital in the Innovative Performance of Service Companies: A Study in Ecuador

Abstract

The relationship between human capital and innovative performance in service companies has been studied in countries with fast-growing economies and knowledge-intensive companies, but little evidence exists in other contexts. The research examined the relationship between human capital variables and the innovative performance of Ecuadorian service companies. The methodology is quantitative. It is a non-experimental, cross-sectional investigation, and data from Ecuador from the national survey of innovation activities 2015 were used. A bivariate probit regression was performed. The results indicate that the variable training in innovation activities is positively related to service innovation, but not to process innovation, because service innovation requires a greater development of skills and abilities than process innovation in these activities. Company workers and the variable workers with higher education are positively related to process innovation, but not to service innovation. The research contributes to the gap in the literature on the relationship between human capital variables and innovative performance and provides empirical evidence of the relationship in developing countries where evidence is scarce. The research has practical implications for managers and administrators of service companies: Increasing training in innovation activities can increase the potential for service innovation and increasing workers with higher education increases the innovative potential in the processes in these companies. The originality of this study is that it presents evidence of this relationship in a developing country that has companies in a different context such as scarcity of qualified human resources, low level of R&D investment, and companies with a medium level of knowledge complexity, since the evidence focuses on companies in developed countries and knowledge-intensive companies.