probability of IPR innovation outcome by 40 percent (27 percent is the increase in the probability of introducing new products and 18 percent of introducing a new process). Location near the capital Bogotá only seems to significantly influence product innovation.

**Human capital** is an important factor. Even though there is a low level of human capital in Colombian firms and this is expected to seriously impair the ability to utilize innovation investment, the share of employees with tertiary education positively affects the possibility of introducing a new product (which is also positively influenced by the share of employees with secondary education) or a new process (Table A.4.4). These results are coherent with the traditional view (Nelson and Phelps 1965) that highly educated employees are more likely to be able to recognize, value and exploit new technical opportunities in the economy. In addition, they also fit with the analysis made within the relatively recent paradigm of the “learning economy” (Lundvall and Johnston 1994), where the role of higher educated people is made all the more important by their ability to adjust better than others to the rapid changes in knowledge allowing them to place themselves always at the knowledge frontier and preserve their role of innovators.

**Collaboration on innovation.** The analysis confirms that collaboration with universities, research centers or suppliers improves the introduction of new products or IPR innovation. It could be argued that only larger firms have the capacity to collaborate with universities and research centers, and as such these explanatory variables are proxies to firm size. The model controls for this by including firm size in the explanatory variables. Collaboration with universities does not seem to be significant in influencing the introduction of a new process, and this confirms what we have already presented above in the case of Chilean firms. From the marginal effect analysis (please refer to table A.4.6) it appears that collaborating with universities could increase the probability of innovating in products and IPRs respectively by 44 and 51 percent, while collaborating with research centers (public or private) would increase such probabilities by 58 and 57 percent. With all due caution in interpreting the marginal effects values, it is clear that such collaboration and the public-private linkages between firms and knowledge centers seem the most influential factor in determining innovation outcomes.

**Training and re-education.** If Colombian firms train and further educate their employees they improve their probability of innovating. This is particularly the case if the training and education activities are related to innovation and development or organization. Organizational training or education seem to affect the introduction of a new product or process but it does not seem to affect significantly IPR innovation. Quite surprisingly, the training and upgrade of education for management does not seem to have any positive or significant effect on the innovation capacity of the firms.

# **7. FURTHER ANALYSIS**

The analysis in this paper suffers some limitations, most of which come from the surveys, which present inconsistency in the data. The work done for this analysis has dealt with some of these inconsistencies or found a plausible explanation for them. However, in some cases it is very difficult to eliminate them, partly because they are implicit in the structure of the analysis (as in the case of the Chilean survey and the perceptional nature 16