Nesta Working Paper 13/12
Issued: November 2013
Abstract
In spite of the emphasis given to the role of innovation as a driver of high-growth episodes, very little is known about the characteristics of the process which leads to the production of innovation among HGFs. For instance, what are the most common sources of information for innovation among HGFs? What types of organisations do HGFs tend to collaborate with for the purpose of innovation? Do they differ from those used by more slower growing firms? Do HGFs benefit from specific types of knowledge spillovers? Do innovative HGFs produce more output than non-HGFs? Using linked ONS business datasets we undertake a series of econometric analyses to provide answers to these questions. We find that that growth at national and local level can be stimulated by policy interventions designed to foster greater levels of innovation among HGFs. This can happen in two broad ways: first, government can help create an environment where knowledge spillovers from both patents and investment in R&D can freely circulate. Our results show the importance of the spillovers generated by nearby firms (of either type: HGFs or non-HGFs) for HGFs and this suggests that creating the conditions for the clustering of the economic activities still makes sense. Second, the government can facilitate firms’ investment in intangible assets which can help trigger high-growth episodes. Typically, governments tend to support investment in R&D though tax breaks but in reality the changing structure of the economy suggests that other types of intangible assets may be more important than investment in R&D to trigger innovation among HGFs.
Authors
Vania Sena, Mark Hart, Karen Bonner
The Nesta Working Paper Series is intended to make available early results of research undertaken or supported by Nesta and its partners in order to elicit comments and suggestions for revisions and to encourage discussion and further debate prior to publication (ISSN 2050-9820). The views expressed in this working paper are those of the author(s) and do not necessarily represent those of Nesta.
