Abstract
We analyze productivity and profitability of incremental innovation group and radical innovation group after classifying companies which received R&D support from government into pharmaceutical industry, medical device industry and food industry. Growth Leading Industry is the industry which plays the role of the engine for the future growth. This industry has low percentage in the regional industries but is expecting high growth rate. Thus, investment focused on technology innovation is important in this industry. We define this industry as radical innovation group. Next generation pharmaceutical industry, IT medical device industry, and bio food industry are in this industry. Flagship Industry is the industry in which the proportion of the industry in the region is high but the growth rate is slowing down, stagnating or declining. We define this industry as incremental innovation group. Biotechnology, electronic medical devices and clean health food industry are in this industry. The indicators for productivity analysis are 'Sales revenue per employee', 'Added value per employee' and 'Value added ratio'. The indicators for growth analysis are 'Employee growth rate', 'Total assets growth rate', 'Net income growth rate', 'Operating profit growth rate' and 'Net sales growth rate'. Various comparative results between incremental innovation group and radical innovation group are provided. The results of the study, incremental innovation maintained a stable performance of the organization, but did not achieve a high level of performance. Radical innovations show high levels of performance, although the performance of the firm is not stable. Incremental innovation showed low performance with low technical level, and radical innovation showed high performance with high technical level. Incremental innovation is highly efficient but low in effectiveness, and radical innovation is low in efficiency, but high in effectiveness. The reason is that radical innovation is highly uncertain about performance, and Incremental innovation is low uncertainty about performance.
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