The report compares innovation behaviour between start-ups, internal corporate ventures and established firms in low-tech manufacturing, high-tech manufacturing, traditional services and knowledge intensive services. Figures are drawn from the dataset from fourth Community Innovation Survey (CIS 4).
The aim of this article is to highlight start-up information which may be of interest and relevance to EnterpriseUpfront readers. It is worth noting that the CIS only includes data from firms with over 10 employees and therefore is not representative of all start-ups.
The report highlights that the most Research and Development (R&D) Active start-up firms who completed the CIS 4 survey are high-tech manufacturing (45.8) followed by, low-tech manufacturing (40.2) , knowledge intensive services (29.5) and traditional services (16.3).
Focusing on the Innovation Performance of the sectors (Report: Table 5) the results show that high-tech manufacturing has the highest percentage of innovative active start-ups 53.1 while traditional services start-ups are reportedly much lower at 18.8. Innovation Performance examines differences of firm’s innovation activities, product and process innovation and wider innovation activities.
In low-tech manufacturing and traditional services, start-ups are less likely to perform wider innovation, whereas in high-tech manufacturing and knowledge intensive services, the levels are roughly the same. This is surprising given that new firms have to develop new routines and practices from scratch so it could be expected that they would have high levels of organisational innovation.
The report examines the different information sources for innovation by firm type. Customers are the most cited source of information by start-ups in low-tech manufacturing and traditional and knowledge intensive services. For high-tech manufacturing start-ups suppliers are the most cited source of information.
Across all types of firms and sectors, universities and government labs are the least cited source of information. Evidence shows that very few start-ups use universities as a source of information for innovation (Report Pg8: Table 6).
The report also examines the frequency of innovation collaboration for the four sectors by firm type. The levels of collaboration amongst start-ups are low, high-tech manufacturing (17.7) and knowledge intensive services (16.2) have the highest instances of collaboration of the sectors.
Start-ups are less likely to use appropriability (Intellectual Property and know-how) methods to protect their innovations. Surprisingly, the report highlights that only 11.8% of start-ups in low-tech manufacturing cite patents as being of high or medium importance. For high-tech manufacturing start-up companies this figure is 29%. One reason for this could be the high costs involved in using the patent system and limited effectiveness of patent enforcement for small financially constrained new firms. Service start-ups cited confidentiality agreements as the most used protection method.
To download ‘The Elixir or Burden of Youth?’ visit http://www.dius.gov.uk/~/media/publications/D/DIUS_RR_09_11