本篇文章的目的是回答第一個問題的創新：什么因素決定了企業創新？研究的重點是創新對的環境影響。第一段從理論方法上進行了探討，其次，討論了對創新企業組織結構的影響。在第三部分中，一個企業的戰略進行了探討。創新和競爭優勢之間的關系，將簡單的對企業風險以及企業風險資本進行討論。最后是這一段的主要研究結果。精煉和改進現有的設計和引入一個新概念出發，從過去的實踐中的一個重要的方法之間的區別是在現有的文獻中，對技術創新的核心概念（亨德森克拉克，1990）。創新是很難的一個進程，但它可以創建一個組合的良好的經濟條件和組織條件（Van de Ven，1986）。

 

The aim of this paragraph is to answer the first sub-question: what factors determine innovation in firms? The research will focus on the most important circumstances that influence innovation. First this paragraph starts with a theoretical approach of innovation. Next, the influence of the structure of a firm on innovation is discussed. In the third part, the strategy of a firm is discussed. The relation between innovation and competitive advance will be treated briefly as well as corporate venture capital will be discussed. Finally, the main findings of this paragraph are given.

 

The theory of innovation

 

The distinction between refining and improving an existing design and introducing a new concept that departs in a significant way from past practice is one of the central notions in the existing literature on technical innovation (Henderson & Clark, 1990). Innovation is difficult to program, direct or even predict, but it is possible to create a combination of favorable economic and organizational conditions (Van de Ven, 1986). It is interesting to know what the considerations of the different companies are when deciding to invest in R&D. Together with the characteristics of the companies and the knowledge about innovation this will be examined.

 

It is possible to make a distinction between the types of innovation. Incremental innovation introduces relatively minor changes to the existing product, exploits the potential of the established design, and often reinforces the dominance of established firms. Radical innovation, in contrast, is based on a different set of engineering and scientific principles and often opens up whole new markets and potential applications (Ettlie, Bridges, & O'Keefe, 1984). Incremental innovation tends to reinforce the competitive positions of established firms, since it builds on their core competencies (Abernathy & Clark, 1985) In contrast; radical innovation creates unmistakable challenges for established firms, since it destroys the usefulness of their existing capabilities. Now the types of innovation are defined, the research will continued by focus on the determinants and characteristics of an organization related to innovation.#p#分頁標題#e#

 

Structure of the firm

 

The size of a company has a clear correlation with the degree of R&D (Lederman, 2010). The probability of performing R&D rises with firm size. Larger firms do not only have a greater incentive to undertake R&D than smaller firms but they also realize a greater return from their R&D investments than smaller firms. R&D expenditures rise proportionately with a firm’s size in most industries. All these patterns can be explained by a simple idea advanced long ago as a possible advantage of large firms in R&D, namely R&D cost spreading (Cohen & Klepper, 1996). Cost spreading implies that the rate of technical progress in an industry depends not only on the industry's total R&D spending but also on its market structure. R&D and firm size are related because of the greater willingness of larger firms to incur the risks associated with R&D, the greater access to finance by larger firms, the greater ability of larger firms to internalize R&D spillovers due to greater diversification, and the greater likelihood that larger firms will possess the complementary capabilities (e.g. marketing) necessary to exploit innovations (Cohen et al., 1996).

 

Another characteristic is the centralization or decentralization of a firm’s organization structure on innovation. Organizations with a centralization structures have a management where the concentration of making a decision is in a few hands. On the other hand, decentralization is a systematic delegation of authority at all levels of management. Argyres & Silverman (2004) find that firms in which R&D activities are centralized tend to pursue R&D that has a greater impact on future technological development, and spans a broader set of technological domains, than firms in which R&D activities are decentralized. Argyres et al., (2004) also find evidence that firms with centralized R&D draw more on innovations from other organizations than firms with decentralized R&D. In particular, firms with centralized R&D organizations generate innovations that have a higher level of impact, and impact upon a broader range of technological areas, than firms with decentralized R&D organizations. Centralized R&D firms also appear to conduct technological search outside of their organizational boundaries more widely than decentralized R&D firms.

 

Strategy of the firm

 

Another important characteristic that has influence on innovation in organizations is the strategy of the organization. Galbraith & Schendel (1983) showed a strong empirical link between strategy choice and R&D investment. Climber, niche and builder strategies were dependent on a strong commitment to successful R&D in order to achieve required sales expansion and market share gains. In contrast, harvest and cash out strategies yielded low R&D, signaling decreased support for the product area. For Example, Lengnick-Hall, 1992 found performance-maximizing strategies emphasize technology and product advances as a key to competitive advantage.#p#分頁標題#e#

 

Low performing organizations and organizational slack are drivers of R&D (Greve, 2003). Organizational slack can be defined as the excess capacity maintained by an organization (March & Sivion, 1958). Organizations launch innovations in response to low performance. Some studies extends prior findings on how performance affects innovative efforts (Hundley, Jacobsen & Park, 1996) Performance below a company's aspiration level has been shown to cause strategic reorientation (Audia, Locke & Smith, 2000). Add this prior evidence to the current finding that performance affects the rate of launching innovations, and it seems that performance relates to aspiration level functions as a "master switch" that affects a wide range of organizational behaviors. A firm with a history of high slack and low risk taking is likely to have amassed a large innovation buffer that can be used to respond to low performance by launching innovative products. This all offers an explanation of the paradox of successful firms failing to innovate (Audia et al., 2000).

 

Knowledge is the most important driver for organizations to create innovation. There are different influences that can create an efficient and effective innovation process. Organizations need to invest to create these circumstances. The analysis of Cohen & Levinthal (1990) in R&D investment suggested that firms are sensitive to the characteristics of the learning environment in which they operate. The organizations overall performance depends on the extent to which managers can mobilize all of the knowledge resources held by individuals and teams and turn these resources into value creating activities. According von Krogh (1998) value creation can take place through creation of new knowledge comprising at least five phases: 1. sharing of knowledge, 2. Creation of new product concepts and new service based on shared knowledge, 3. The justification of these concepts deeply rooted in, for example, market studies, trend studies and focus interviews. 4. Building a prototype or initial service and 5. The global leveraging of knowledge, concepts, prototypes and offerings throughout the company.

 

Innovation is difficult and can be a long process. R&D and corporate venture capital (CVC) are two major ways for developing new capabilities. Corporate venture investments are minority equity investments by established firms in entrepreneurial ventures. CVC may substitute for or complement internal R&D in developing new capabilities (Sahaym, Steensma & Barden, 2010). Indeed, developing new capabilities through internal R&D is a relatively slow and inflexible process (Chesbrough, 2002). In contrast, investing in entrepreneurial ventures can help established firms to quickly discover new technologies and capabilities. Moreover, competencies generated through corporate venture capital deals, tend to be more distinctive than those generated through internal firm processes (McGrath & Nerkar, 2004). Thus, CVC investments within an industry may comprise an alternative to industry R&D investments. CVC investment has increased in popularity because such investment can create important opportunities for continued growth through innovation (Folta & Miller, 2002). In contrast, investing in entrepreneurial ventures can help established firms to quickly uncover new technologies and capabilities (Gompers & Lerner, 2001). To avoid the slow process of innovation established firms are willing to invest in CVC.#p#分頁標題#e#

 

Innovation is important for shaping the competitive environment as well as responding to it. Investments in R&D have generally shown to be very dependent upon industry and competitive issues (Ettlie, 1998). So selecting a specific competitive strategy often determines a firm’s need for successful innovation. Using innovative activities effectively to create competitive advantage is dependent on a firm’s ability to maintain its configuration, direct its attention toward desirable product features and service activities, avoid investing in irrelevant but creative ventures, secure timing advantages, and maintain appropriate ancillary capabilities to adequately exploit innovation outcomes. Different routes to innovation offer different strengths and weaknesses along these dimensions (Lengnick-Hall, 1992).

 

Findings

 

This paragraph shows that structure and strategy are important determinants for innovation. First of all the size of a firm has a positive clear correlation with the degree of investment in R&D. Thereafter, firms with centralized R&D organizations generate innovations that have a higher level of impact, and impact upon a broader range of technological areas, than firms with decentralized R&D organizations. Also a firm with a history of high slack and low risk taking is likely to have amassed a large innovation buffer that it can use to respond to low performance by launching innovative products. Selecting a competitive strategy often responds with successful innovations. Finally, CVC could be an important strategy to quickly find new technologies and capabilities through collaboration.

 

The effects of the economic crisis on firms

 

In this paragraph, the influence of the economic crisis of 2008 on firms is discussed. The aim is to answer the second sub-question: what are the effects of the economic crisis on firms? This is done by using several previous research results based on the effects of the economic crisis of 2008 as well as research based on other crisis. This paragraph starts with a description about the constraints caused by the economic crisis. The effect of these constraint on investments firms during the crisis period, are treated in the second part of this paragraph. Besides the negative effect of the economic crisis some researchers claim that the economic crisis also creates opportunities for firms. These opportunities are discussed in the third part of this paragraph. Finally, a briefly conclusion of the findings is given.

 

Constraints during the crisis

 

Financial constraints caused by the crisis can cause a downward shift in the costs inputs, which threat the profitable production (Kogut, 1991), and so does this financial crisis of 2008. This financial crisis caused a negative shock to the supply of external finance. This shock significantly declined the corporate investment during the financial downturn. Firms with a lower amount of cash reserves, a high short-term debt or firms who operate in industries dependent on external finance had the biggest decline. These types of firms are the most constrained during this economical crisis (Duchin, Ozbas & Sensoy, 2010). It is easy to assume that a strategy that worked in the past will be the most effective strategy in this crisis. (Prahalad & Bettis, 1986). But sometimes managers are exposed to forces driving toward strategic change, in times of crisis when past strategies starts to fail (Kiesler & Sproull, 1982). These adaptations to environmental changes are strongly influenced by the interpretations executives make of the environmental changes (Daft & Weick, 1984).#p#分頁標題#e#

 

As a reaction of the negative credit supply shock, firms consider their internal resources like operating income and cash savings to finance their future investments. This in is line with the fact that constrained firms burn their cash savings in the crisis period (Campello, Graham & Harvey, 2010). GDP and GDP per capita in nations all over the world are affected by this financial crisis. The increase of exports and imports slowed down during the financial crisis period. This clearly shows the effect of the crisis on the production firms (Chor & Manova, 2009). In terms of financial constraint more than one of three firms is affected by the economical and financial crisis. One out of five claims to be very affected. Of these very affected firms, four out of five are small enterprises. This indicates a slight correlation between the financial constraint and the size of a firm. More than half of the constrained firms postpone or cancel their investment plans when the capital markets are tight (Campello et al., 2010). This could declare the substantially decline in new lending during the financial crisis across all types of loans. Some of this decline can be reflected in a drop in demand as firms scaled back expansion plans during the recession. Another possible reason is banks significantly reduce their lending to the corporate sector (Ivanshina & Scharfstein, 2010). The research of Campello et al. (2010) is based on asking CEOs whether their firm is financially constraint during the economic crisis, instead of looking at characteristics like asset size, ownership form or credit ratings. Doing research based on the mentioned characteristics instead of interviews, would lead to more objective results.

 

In times of crisis firms has less access to credit. This is the biggest constraint in economical downturn. This constrained is followed by a higher cost of fund and finally difficulties in accessing a credit line. A large part of the financially constrained enterprises indicate that the ability to invest in positive Net Value Projects is tied to their ability to raise external funds in the capital market (Campello et al. 2010). So logically, the financial crisis disturbs development in industries that are more dependent on external finance. This declares the fact that in developing countries, where the availability of the national bank is relatively more limited, the effect of the crisis is stronger than in well-developed countries (Dell’Ariccia, Detragiache & Rajan, 2008). Also seen is that the financial crisis relatively less affected the developed nations with a stronger National Systems of Innovation (NSI). In most of the times the NSI rate is inherent with the overall development of a nation (Filippetti & Archibugi, 2010).

 

Investments during the crisis

 

In the previous sub-paragraph a slightly correlation between the size, development and the matter of financial constrain is shown. This sub-paragraph focuses on the different reactions of these firms in terms of investment. Does this economical crisis influence firms’ investment behavior?#p#分頁標題#e#

 

In the United States and the European Union the crisis clearly has influence on firms’ expenditures compared to Asian firms. Where the US and the EU cut on their employees, the Asian firms increased their number of employees. The cuts on technology and marketing expenditures and the cash holding doubled in the crisis period. Besides, the cut on dividend payout was almost four times as high in times of crisis compared to the pre-crisis period (Campello et al., 2010). During the economic crisis firms firstly cut in investment on innovation, marketing and other technical expenditures. This is because these expenditures have an indirectly influence on a firms’ product (Zona, 2012). Where the large firms cut more on technical expenditures than small firms, the smaller firms cut more on capital and marketing expenditures compared to the larger enterprises. Public firms cut more on tech expenditures than private firms. On the other side, private firms cut more on marketing. Only public firms increase expenditures, namely the capital expenditures (Campello et al., 2010).

 

There is a lot of disunity about the question if Multinational Enterprises (MNEs) have another reaction on an economic crisis compared to domestic firms (Varum & Rocha, 2011). Several studies found evidence MNEs have a better reaction to crisis than domestic firms, and also recover faster after crisis. MNEs survive the economic crisis because they may better extract benefits from the channels integrated across multinational networks (Chung & Beamish, 2005). Other studies conclude MNEs react more abruptly to economic recessions than domestic firms. An example is the fact MNEs transfer production facilities to other regions or countries (Lee & Makhija, 2009). According to Varum et al., (2011) there is no significant difference in job losses between MNEs and domestic firms in times of crisis but in terms of turnover, MNEs seem to react better on a crisis. Because the research about MNEs and domestic firms is based on crisis in the past, it should be investigated if the same result is valid for the 2008 crisis.

 

Opportunities in the crisis

 

Less research is available which is about the opportunities in an economical crisis. This can be declared by the fact that a financial crisis does not create that many opportunities or because less research about this topic is done. Unless the lack of literature about this topic, it is possible to describe some opportunities in the economic crisis.

 

The economic crisis can be seen as an environmental jolt, it restructuring the industry, relocating its boundaries and changing the basis of competition. New opportunities are created because it redefines attractive market positions (Meyer, Brooks & Goes, 1990). During such a disorder, industry leaders may lose their dominant position and it generates a chance for firms to enter attractive industries that previously maintained high barriers. This causes the incentive for firms to grab opportunities through acquisition in order to enter attractive industries. The crisis makes acquisition easier because overpayment for acquisition becomes less likely and restructuring the acquired firm is also easier in a time when the stakeholders are more willing to accept a painful restructuring process (Wan & Yiu, 2009). Acquisition can lead to opportunities for firms to reconfigure their businesses by expanding their existing resource bases and creating new possibilities (Karim & Mitchell, 2000). Therefore, Wan et al. (2009) find support that corporate acquisitions are positively related to firms performing during an environmental jolt.#p#分頁標題#e#

 

Besides acquisition, another study provides evidence subsidiaries of MNEs can take advantages of an economic crisis. This applies to subsidiaries with a stronger focus on across-country operation flexibility, which can take advantage of their multinational networks (Chung, Lee, Beamish & Isobe, 2010). This result is consistent with the research of Chung & Beamisch (2005), which demonstrates that MNEs perform better in crisis, because of the advantage of their integrated channels across multinational networks. However, giving up the benefits of local responsiveness is not cost free when a country’s economy starts to recover (Chung et al. 2010).

 

Findings

 

So, the economical crisis of 2008 had a major effect on most firms’ performance. Where the smaller firms and the developing countries are more constrained, the larger firms and developed countries are more resistant for such an environmental jolt. During the economic crisis firms firstly cut in investment on innovation, marketing and other technical expenditures because these expenditures have an indirectly influence on a firms’ product. Large firms cut more on technical expenditures where smaller firms cut more on capital and marketing expenditures. The biggest constraints in this crisis are the less access to credit followed by a higher cost of fund and finally difficulties in accessing a credit line. In the US and the EU firms strongly cut on their employees, remarkably in Asia the number of employees increased. MNEs perform better in a crisis compared to the domestic firms cause of their flexibility who can take advantage of their multinational networks.

 

Impact of the crisis on innovation of firms

 

The aim in this paragraph is to describe the impact of the crisis on innovation of firms on the basis of the findings in paragraph one and two of this chapter. Findings of paragraph 2.1 will be combined with the effects of the economic crisis described in paragraph 2.2 in order to formulate the impact of the crisis on innovation. Those statements made, will be examined using recent research about the impact of the 2008 economic crisis on innovation of firms.

 

Size of firms and innovation in crisis

 

First, the relation between the size of firms in terms of innovation in the crisis is treated. Paragraph 2.1 describes the clear correlation between the size of the firm and the degree of R&D. When the size of the firm rises, also the probability of performing R&D rises. One of the facts to declare this correlation is the greater access to finance. One of the effects of the economic crisis is the negative credit supply shock, discussed in paragraph 2.2. The access to external financing declines in an economic crisis. All firms of different size will perceive this constraint in the extent they are using external finance for innovation. Another effect of the crisis is the decline in GDP of a country. This drop is partially caused by the demand shock caused by the economic crisis. This demand shock leads to a decrease of turnover and profit, which on their turn decrease the access to internal resources. This is why firms burn their cash savings in times of crisis. This effect is also affecting both small and large firms. Based on these financial consequences of the crisis, it is not possible to define if larger firms react different during the crisis in terms of innovation. In contrast, studying the investments of small and large firms during the crisis period will give information about this difference. Previous studies have defined that innovation is one of the first expenditures to cut on in times of crisis because these expenditures have an indirect influence on a firm’s product. Large firms cut more on technical expenditures than small firms. Assumed is that the impact on innovation during the crisis is stronger, in a negative content, than for smaller firms. This statement is in line with the research of Paunov (2011), which also concludes larger firms, cut back on their innovation investments.#p#分頁標題#e#

 

Knowledge and innovation in crisis

 

In this part the relation between knowledge, innovation and the economic crisis is considered. One of the drivers of innovation is knowledge. Firms constantly have to develop new knowledge in order to create innovation opportunities. There are two ways firms can develop knowledge. They can develop knowledge internal, like internal R&D departments, or external, like corporate venture capital. A factor that influences innovation internally is the degree of centralization in a firm. The R&D of centralized organizations does have a bigger impact on the future product development, and can therefore be considered more successful. Looking at these possibilities of knowledge development, there are some consequences of the crisis that turn out to be negative for this development. First, the economic crisis leads to firms cutting on their technology expenditures. R&D is part of this and so does the crisis reduce the amount of investments in knowledge development. This does not only have consequences for the firms which expenditures on innovation reduced, but also on the firms who are employed by the bigger firms in order to develop new concepts. Both firms are in this way affected by the economic crisis and the reduction of knowledge development caused by the economic crisis. Filippetti et al. (2011) also observed this phenomenon. They have shown that only a substantial amount of firms have managed to maintain their investment for innovation, but the number of firms able to expand it has been dramatically dropped and the firms that have decreased the investments in innovation have also substantially risen.

 

Performance and innovation in crisis

 

The relation between performance, innovation and the economic crisis is treated in this part. Research showed that performance is another driver for innovation. Paragraph 2.1 describes that organizations launch innovations in response to low performance. The economic crisis of 2008 affected firms worldwide, which caused a global decrease in firm performance among all industries. The theory about innovation and low performance as a driver of innovation implies that the economic crisis should stimulate innovation. Concerning the several researches on innovation in times of crisis, it is not possible to substantiate this assumption with research results. There are several possible explanations why this statement is not valid for the economic crisis of 2008. The first possible explanation is the theory is valid for firms with a low performance compared to other firms in the same industry. Because of their own low performance, they have a competitive disadvantage. Firms can therefore innovate with the aim of catching up with their competitors. Because the economic crisis of 2008 caused a global low performance, the performance of the competitor was not necessary worse than the performance of the own firm. This could declare why there was no trigger for innovation during the crisis period. Another possibility is that there was certainly a trigger to innovate in the economic crisis, but firms simply did not have the financial resources to innovate. As stated before, one of the first expenditures firms cut on in a crisis is R&D, because it does not affect the firm’s product directly. In the end, the low performance during the crisis, in contrast to the theory, did not lead to an increase in innovation. Two possible explanations for this are, that affected firms not always had the worst performance compared to their competitors, who did not trigger them to innovate, or firms did simply not have the financial resources to innovate.#p#分頁標題#e#

 

Strategy and innovation in crisis

 

Considered in this part of this paragraph is the relation between strategy, innovation and the economic crisis. Paragraph 2.1 contains statements that the strategy is related to the way firms innovate. For example, climber, niche and builder strategies were related to a strong commitment to successful R&D. Looking at the effects of the economic crisis, paragraph 2.2 contains information firms in a financial crisis are sometimes forced to choose another strategy. The new strategy chosen by the firms depends on the interpretation the executives make of the changed circumstances. For this reason, it is not possible to define a general switch and define what the new strategy of firms was during the economic crisis of 2008. Besides, there is no research about the new strategies firms choose during the crisis period. It makes sense to assume firms choose a more defensive strategy with less innovation as a result, but this cannot be proven with the use of previous research. In the end, the statement holds that the economic crisis changed strategies of firms. Because the strategy influences innovation in firms, is concluded that the economic crisis has an influence on innovation. Because of the lack of research, it is not possible to define of the change in strategy leads to an increase or decrease of innovation in times of crisis.

 

Competition and innovation in crisis

 

Finally, the relation between competition, innovation and the economic crisis is considered. Paragraph 2.1 describes that innovation is important for shaping the competitive environment as well as responding to it. By using innovation activities efficiently, firms are able to create competitive advance. If the economic crisis causes an increase in competition, it is likely firms will increase their innovation. In contrast with the decreasing competition in times of crisis, firms are more internally focused and innovation activities will also decrease. A lot of research on the economic crisis is done by research in the total investments of regions or firms, or by looking at the internal changes in firms; what do they change in order to survive in times of crisis. There is a lack of information on the changes in competition between firms during the crisis period. This makes it, for now, impossible to define what influence the competition during the economic crisis has on innovation.

 

Findings

 

This chapter made some statements about the impact of the economic crisis on innovation, based on different areas of innovation theory. The statements will be mentioned briefly. 1) The economic crisis affects both small and large firms, however the cut on investments in innovation are the largest for large firms. Small firms in times of crisis cut more on other areas. 2) The reduction in innovation investments caused by the economic crisis, create a decrease of knowledge development. This leads to less innovation during the crisis which influences both the firm for which the innovation is intended as well as when applicable the firms who perform research commissioned by the large firms. 3) Low performance during the crisis, in contrast to the theory, did not lead to an increase in innovation. Two possible explanations are the fact that affected firms not always had the worst performance compared to their competitors, who did not trigger them to innovate, or that firms did simply not have the financial resources to innovate. 4) The economic crisis changed strategies of firms. Because the strategy influences innovation in firms, is concluded that the economic crisis has an influence on innovation. Because of the lack of research, it is not possible to define of the change in strategy leads to an increase or decrease of innovation in times of crisis. 5) Because there is lack of information about competition in the economic crisis, it is not possible to define what influence competition has on innovation during the economic crisis.#p#分頁標題#e#