New Technologies and Traditional Innovation Determinants in the Greek Economy

Abstract

It is widely recognized that the recent economic crisis in Greece is due not only to excessive government spending and tax evasion, but also to the low competitiveness of its economy. Innovation has become of critical importance for the competitiveness of firms, sectors and countries in the modern economy. This paper presents an empirical study of the ‘new’ innovation determinants based on information and communication technologies (ICT) and also of the ‘traditional’ innovation determinants in the Greek economy. In particular, it investigates the impact of three different ICT (internal information systems (IS), e-sales and e-procurements) and also of six important traditional innovation determinants identified by previous relevant research (four ‘external’ ones—demand expectation, price and non-price competition, market concentration—and two ‘internal’ ones—investment in research and development (R&D) and firm size), on the innovation performance of Greek firms. It is based on firm-level data collected through a survey of 271 Greek firms before the start of the economic crisis, which have been used for the estimation of regression models. It is concluded that in the Greek ‘innovation-averse’ national context (characterized by low level of innovation and uncertainty avoidance culture) none of the examined external (market-related) traditional innovation determinants has an impact on product or process innovation of firms, while on the contrary the internal ones, R&D expenditure per employee and size, affect positively both. Furthermore, the examined new technologies seem to be important drivers of innovation: it is concluded that the internal IS have a positive impact on both product and process innovation, the e-sales only on process innovation, but the e-procurement on none. Our results indicate the high potential of ICT as innovation drivers even in such innovation-averse and lower economic development contexts, which, however, vary between different types of ICT.