Identifying Critical Factors Contributing to Successful Innovations: A Pilot Study from Service Sector of Pakistan

Abstract

The study is a pilot investigation of the critical factors that are contributing to successful innovations in the service sector in Pakistan. The study dependent variable is innovation performance which has been divided into four main dimensions that are service innovations, process innovations, organization innovations, and marketing innovations while the independent variables are human capital, acquisition of knowledge, information sources for innovations and cooperation for innovation, and the moderating variables are size of firm in term of number of employees and budget for innovation. The data was collected using the modified CIS (community innovation survey) questionnaire which is mostly used by most European countries to access the innovation performance of firm. A sample of 127 firms was taken from different service firms from banking, software development, health, telecommunication firms. The study has firstly used descriptive analysis to explain the characteristics of sample then different inferential statistics are used to check the hypothesis developed for the study. The reliability, validity, internal consistency and internal correlation of items in the CIS was checked by using values of Cronbch's Alpha values and KMO values for factor analysis. The study has used the Tobit regression model and the results have shown the P value of human capital and information sources are significant for service innovations and the value for cooperation for innovation is significant for process innovations while human capital and cooperation for innovation had significant p values at 5 percent significance level for organizational innovations and acquisition of knowledge and information sources have significant p value for marketing innovations. And the value for budget for innovation is significant for firm's organizational innovations.