Title: Design and European firms’ innovative performance: Evidence from European CIS non anonymous data - IPTS WORKING PAPER on CORPORATE R&D AND INNOVATION - Nr. 08/2011
Publisher: Publications Office of the European Union
Publication Year: 2011
JRC N°: JRC68197
ISBN: 978-92-79-23102-5
ISSN: 1831-9408
Other Identifiers: EUR 24747 EN/8
OP LF-NH-24747-EN-N
URI: http://iri.jrc.ec.europa.eu/papers.htm
DOI: 10.2791/72880
Type: EUR - Scientific and Technical Research Reports
Abstract: The objective of this study is to provide an analysis of the importance of design – defined as the procedures, choice of elements and technical preparation to implement a new product – and R&D investment as drivers in European firms’ innovation performance. In doing so, it partly compensates for the lack of empirical evidence in the literature by using non-anonymised data from the third wave of the European CIS, and estimating a system of simultaneous equations to tackle the endogeneity inherent in these investment choices and the externalities associated with them. In addition, the two main variables of interest are continuous, which is different from the majority of CIS-based studies. The robustness of results confirms the crucial role of design investment for innovation success in 18 European countries for both the manufacturing and service sectors. In particular it found an increase of 1% expenditure increases innovation sales by between 0.34% and 0.49%, while the same increase in R&D investment increases innovation sales by between 0.64% and 0.86%. Interestingly, while investing in design shows similar innovation output returns for small, medium-sized and large enterprises, this is not the case for R&D investment. While the latter is not surprising, the former is, to the extent that one believes larger firms are better internally organised than SMEs. All in all, the empirical evidence confirms design as a complement to technological R&D and as a driver for user-centred incremental (new-to-the-firm) and radical (new-to-the-market) innovations. The policy conclusions are clear: design is a less costly alternative to R&D for many SMEs and a policy of supporting design should be considered, as this might be a more cost-efficient support strategy.
JRC Directorate:Growth and Innovation

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