Predicting innovation activity in european manufacturing firms: a multi-country empirical study

Abstract

The purpose of this paper is to investigate the factors that influence the Internal Process Innovation (IPI) Activity of the European manufacturing firms. Moreover, a predictive model is developed that can be used to predict which manufacturing firms are more likely to introduce any new or significantly improve their internal processes. This survey is part of the “e-Business Watch,” a service launched in 2007 and provided by “empirica GmbH” to the European Commission, Enterprise and Industry Directorate General, in co-operation with renowned international partners. In the present study, 914 European manufacturing small, medium and large enterprises were examined and a set of hypotheses, regarding their innovation activity, were developed. The results showed that the adoption of Enterprise Resource Planning (ERP), Customer Relationship Management (CRM) and the electronic information exchange between business partners are positively related to firm’s process innovation activity. Moreover, the results revealed that the employment of ICT-qualified employees, investments in ICTs, firm size and long- term relationships with suppliers also played a major role for European manufacturing firms to conduct internal innovations. The paper highlights the fact that the innovation activity of the firms is deeply affected by a number of different factors, both internally and externally.