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The impact of Business Innovation modes on innovation performance: the case of Belarus - Deusto Knowledge Hub Explorer

For many firms, the question is not about whether or not to innovate but about how to increase the degree of novelty of their innovations in order to improve their competitiveness and economic performance and reach access to new markets. This thesis contributes to advance knowledge on business modes of innovation employed by SMEs (small and medium enterprises) and their role in firm’s innovation performance in different country contexts and, in particular, in the context of economies in transition. It focuses on a current debate on learning modes employed by the firms and their impact on firms’ innovation performance. We conducted the first empirical analysis on the case of Belarus.The results of a grounded meta-analysis have revealed that firms in different country contexts, which combine the STI (science, technology and innovation) and DUI (doing, using and interacting) modes of innovation are more likely to innovate. We have conducted the first study of the effect of STI/DUI modes on innovation performance of SMEs in the new context of economies in transition. We have enriched the methodology of measuring the DUI mode by adding new indicators to capture “doing” and “using” drivers. Moreover, it has been estimated which of the modes, the STI or DUI is more effective in generating innovation. In addition, we study the influence of STI and DUI not only on product but also on organizational innovation. The results of regression analyses have provided the evidence of how the STI and DUI modes influence these two types of innovation. Thus, Belarusian SMEs combining the STI and the DUI modes are more likely to generate product innovation. However, SMEs that rely on the DUI mode alone are more likely to generate product innovation than those that rely on the STI mode alone. With respect to organizational innovations, we have found out that the STI mode does not relate to this type of innovation to a significant extent. In contrast to product innovation, firms combining the STI and DUI modes of innovation are not more effective in generating organizational innovation than firms relying on the DUI mode alone.While conducting these analyses, we have faced challenge in estimating the extent to which SMEs rely on the STI or DUI modes, and what drivers are crucial in this combination. The STI and DUI modes of innovation were not able to show how SMEs could mix different drivers of innovation or what the composition of innovation drivers was in the combination of the STI and DUI mode of innovation. Therefore, we have explored how different drivers of innovation can be successfully reconciled within a firm. For this purpose, we have introduced a new research instrument that enables us to determine the business innovation profiles and modes – the RTH (Research, Technology and Human Resource Management) model of innovation. This model involves three drivers: Research (R), Technology (T) and HRM (H). The novelty of this study is that it goes beyond the analysis of ‘modes of innovation’ introduced by Jensen, et al. (2007) and proposes an ‘innovation profile’ as a detailed description of an innovative firm. Firms with similar innovation profiles have been grouped into clusters which have been identified as ‘modes of innovation’. Thus, we have revealed 17 innovation profiles, which we have grouped in the three modes of innovation by means of cluster analysis. Firms that belong to a mode (cluster) that is characterized by low level of the ‘R’ and high levels of the ‘T’ and above the average level of the ‘H’ driver report the highest innovation output among the revealed modes. Firms in this cluster are characterized as ‘creative organizations’ and are able to produce new-to-international-market products and services.  

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