Product, process and organizational innovation: drivers, complementarity and productivity effects

2010 – In this paper, researchers from United Nations University-Merit in Maastricht describe how they complemented the econometric CMD model for innovation. As input variable they added ICT (e-commerce and investment in broadband) to R&D. Process and organizational innovation were added as output variables to product innovation.
They examined the data from the Community Innovation Survey (CIS), the effect of R&D & ICT on  innovation output, and the relationship between innovation (product, process, organizational innovation) and productivity.

Some of the findings
The effect of R&D is different for industry and services. In the industry R&D has effect on all three forms of innovation, but in the service sector this cannot be seen on any of the three types of innovation. This means that only in the industry R&D is a good measure for innovation. However, it often is used as a general indicator. Wrongly so. ICT is very important for successful innovation in services. This applies to a much lesser degree for the industry.
Organizational innovation is the only form of innovation that leads to increasing productivity. Product – and process innovation  lead to higher productivity only when they are combined with organizational innovation. This is true in both sectors, but strongest in the service sector.

Reference
See attached the full Working Paper: 2010-035: ‘Product, process and organizational innovation; drivers, complementarity and productivity effects’. Michael Polder, George van Leeuwen, Pierre Mohnen and Wladimir Raymond

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