Abstract
There is still a lack of empirical evidence prevalent about innovation in knowledge-intensive business services (KIBS), and more particular, about determinants of innovations in small firms to sustain their future development. Studies in this area suggest that different determinants will affect different forms of innovation outputs of KIBS. This paper investigates the direction and the significance of these influences on propensity to innovate. The empirical evidence is based on quantitative and firm-level data gathered through an email questionnaire, which yielded 128 qualified responses from small KIBS in the Czech Republic. The analysis is based on binary logistic regression to identify the effects of determinants on the propensity to innovate. In addition to the consistent results produced by studies in this area, we found reverse relationships between innovation and selected determinants. Negatively evolving knowledge (especially lack of qualified employees) and market determinants (lack of information about the market), positively stimulated small KIBS towards the propensity to introduce organizational innovations (structural and human resources practices), followed by increasing intensity of competition positively related to introducing a new service to the firm (especially t-KIBS) and insufficient availability of business partners increasing the marketing efforts. It’s evident that some negatively evolving determinants perform as incentives or driving forces to specific types of innovations. The results of this study could also be useful for owners and managers in KIBS firms engaging in innovation activities and government support, or incentivize the propensity to innovate.
Highlights
There is a growing body of empirical literature available on success/failure factors or determinants which hamper or incentivize the propensity to innovate in cross-sectional comparison with services or knowledge-intensive business services (KIBS) [1,2,3,4,5], and to lesser extent in the small business area [6,7,8]
Based on the research results of previous papers, we are giving rise to the following research question: How do different determinants influence the propensity of small KIBS to innovate in the Czech Republic? This paper aims to investigate whether the selected determinants influence innovation activity and in which directions
We found that lack of access to skilled employees is negatively related to the newness of services to the firm, but not in the case of organizational innovations and nor to service modifications or marketing innovations, so Hypothesis 5 (H5) is rejected
Summary
There is a growing body of empirical literature available on success/failure factors or determinants which hamper or incentivize the propensity to innovate in cross-sectional comparison with services or knowledge-intensive business services (KIBS) [1,2,3,4,5], and to lesser extent in the small business area [6,7,8]. Amara et al [1] found that financial obstacles are negatively related to product and process innovations, while knowledge obstacles tend to be negatively associated with the delivery and managerial innovations in the sample of Canadian KIBS firms. Study of KIBS firms in Palestine by Morrar and Abdelhadi [8] considered that financial factors have negative impacts on the product and process of innovation as well as the organizational and marketing innovation, followed by the demand factor, which was reflected by the weak competition and uncertainty. Chichkanov et al [9] provided research results, in an emerging economy such as Russia (based on major cities), suggesting that KIBS firms experiencing negative market and knowledge conditions are more liable to undertake non-technological innovations
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