What hampers innovation? Revealed barriers versus deterring barriers

Abstract

Innovating firms are likely to face several challenges and experience different types of barriers. In this paper we argue that it is necessary to distinguish between two kinds of barriers to innovation. The first corresponds to what we describe as revealed barriers and reflects the degree of difficulty of the innovation process and the learning experience consequent on the firm engaging in innovation activity. The second type of impediment, which we label deterring barriers, encompasses the obstacles that prevent firms from committing to innovation. We use data from the 4th UK Community Innovation Survey (CIS4) to investigate the relationship between firms' engagement in innovation and their assessment of the barriers to innovation. We show that the relationship is curvilinear in the case of costs and market barriers. These results have important implications for innovation policy and innovation management.

Determinants of Innovation and Productivity in the Service Sector in Mexico

“…This result might lend some support to literature on barriers to innovation, which suggest that firms need to engage, at least to a certain extent, in innovation in order to develop the ability to identify the obstacles to innovation (Mohnen et al 2006;D'Este et al 2012). The limited engagement in innovation recorded by both manufacturing and services firms in Mexico may indicate their poor capacity to characterize the factors that constraint innovation performance.…”

The factors constraining innovation performance of SMEs in Croatia

“…Furthermore, DʹEste, Iammarino, Savona, and von Tunzelmann (2012) argue it should be distinguished between barriers that affect degrees of innovation activities experienced mostly by innovative firms (or revealed barriers) and barriers that hinder firms from innovation activities (deterring barriers). Innovators face many problems and risks but they are motivated to overcome them due to their superior market position (e.g., Carpenter & Nakamoto, 1989) and increase of profitability (Cho & Pucik, 2005) that can be achieved through innovation.…”

“…However, it is difficult to define an appropriate measure of many constraints and measure their presence with great precision. Therefore, studies often rely on perception (DʹEste et al, 2014;DʹEste et al, 2012;Galia & Legros, 2004;Mohnen & Röller, 2005;Tourigny & Le, 2004).…”

Financial constraints and the failure of innovation projects

“…The literature highlights access to financing as being a crucial determinant for innovative firms (D'Este et al, 2012;Hölzl and Janger, 2014;Segarra et al, 2008). Among the different types of barriers, financial constraints are highly important due to the possible macroeconomic consequences.…”