Prevalent, but neglected: an empirical investigation of informal, non‑novel, incremental (NNI) modes of innovation in Australian businesses
Creators: name: O'Brien, Kieran
Publisher: name: University of Tasmania
Year: 2024

description: Much firm-level innovation involves incremental change, low degrees of novelty, and the adoption of knowledge, technology and innovations produced by others. This informal, non?novel, incremental (NNI) mode of innovation is prevalent, essential for the productivity and prosperity aspirations of firms, regions, economies and societies, yet remains persistently neglected in firm-level studies of innovation. This thesis addresses a consequent need for new research on NNI innovation based on adoption and diffusion rather than novelty creation, investigating the capabilities, strategies and performance characteristics of NNI innovators. <br>As a thesis by publication, this research comprises seven separate research papers drawing from business-level innovation studies in Australia. Each paper provides new evidence on typically overlooked dimensions of NNI innovation, including the importance of ‘low-capability’ innovations, informal knowledge sourcing, outsourcing of creative innovation activities, NNI strategies, capabilities and performance; informal strategies to find new ideas, and measurement insights from low-technology sectors. Contributing papers are predominantly quantitative, examining the characteristics of NNI innovation modes with descriptive statistics and logistic regression analysis.<br>The results challenge the idea that high novelty innovations are the most important for firms, even for those firms with high R&amp;D capacity and novel technological innovations. High <i>intensity</i> informal knowledge sourcing, a characteristic activity of NNI innovation, is found to be positively and significantly correlated with new organisational, managerial and marketing innovations and product and production process innovations, as well as with innovation performance. Results indicate that outsourcing innovation development activity is important for more than half of Australian businesses, and disembodied knowledge sourcing exhibits a positive effect on organisational, managerial, and marketing innovations. Evidence of the economic weight of NNI modes of innovation and their prevalence in services and smaller size firms is presented. Notable variations for both innovation strategies and performance are observed for NNI innovators, highlighting their potential relevance for innovation policies, though also for innovation theories and future research. <br>Collectively, the research results imply that a narrow focus on innovation capability measured by R&amp;D and technological innovation novelty, may often miss the mark, particularly for NNI innovators. The results imply that innovation capability can alternatively be improved by cultivating informal relationships and networks, maintaining deep knowledge of expert technology, knowledge and services providers, and embedding strategic approaches to internal knowledge sharing. One key and recurrent implication of these research paper results is that informal activities should be planned, organised and intense to stimulate innovation success. At the front end of innovation in particular, the results imply that firms should regularly cast the net wide and far for new ideas, to optimise their chances of innovation success.<br>The findings highlight a need for new measures to capture informal activities, and creative activities conducted internally versus externally, for new analyses of existing innovation data to better profile modes, strategies and capability variations, and a need for new input and impact measures for informal, non-technological innovations. Proposed options for the latter include measures of specific, informal capabilities related to organisational, managerial and marketing innovations, the degrees of novelty and impact from such innovations, and integrating analyses of firms’ most important innovations into future studies.<br>One important theoretical implication of this research is that Absorptive Capacity (AC) theories should broaden to incorporate new informal elements, beyond external and internal R&amp;D capacity. Results also imply that AC approaches should focus on understanding the antecedents and mechanisms of informal activities as they relate to innovation capability and performance, an important area for future research.