On 26 March at 14:00 Tõnis Tänav will defend his doctoral thesis „Dynamics of firm Innovation Strategies: Relationship with Public Sector support”.
professor Kadri Ukrainski (PhD), Faculty of Economics, University of Tartu
Jari Romanainen (PhD, Senior Policy Adviser) Technopolis Group, Finland
assistant professor Tarmo Kalvet (PhD) Tallinna University of Technology
Innovation has been on the forefront of public policy as a panacea for economic ills for a long time. Governments on various levels support the creation and diffusion of innovations in private firms with public money. It is justified to ask – does it change firm behaviour?
The thesis analyses whether firms change their innovation strategies if they have received business support. The support can be in various forms, such as financial aid to investments, training and skill development, developing marketing plans and exporting plans, innovation and R&D assistance, and so forth.
Based on the Estonian example, some commonalities can be established about innovation strategies. Firms adopt different styles of creating innovations relying on diverse inputs, such as their cooperation partners, investment choices or information sources.
Firms change between different strategies often and with a short time-frame, in less than two years. Meaning that with proper incentives, it is possible to influence firm behaviour without long lags. However, shifts between strategies show incremental evolution. Firms without any innovation strategies develop simple strategies first, followed by more complex strategies later.
The relationship with business support is not uniform. Support for physical capital investments is positively related with simple innovation strategies. Support for innovation and R&D activities is more related with complex innovation strategies, based on open innovation strategies and cooperation with universities. Firms with training and skill development instruments are less likely to stop being innovative at all.
Business support should adapt to the proper target audience. Leap-frogging might have limits if firms are very inexperienced. In addition, policy instruments ought to be demanding for firms. Innovation policy instruments should be challenging enough to create strategies that we wish to promote — cooperative, open and R&D intensive.