The Role Of Finance As A Driver Of Innovation

Decent Essays

This table shows that high skilled employees are working more in the innovative firm than non-innovative firms.
Not Only skills but age of employees also affect on innovation performance. The age of the employees and R&D outlay/innovation has negative relation. Also larger share of female employees in workforce increases the innovation performance of the employees whereas higher share of part-time employees has a negative share with the innovation performance (Wagner, 2012)Companies with fewer than five employees were important source of innovation in the industry (Jelling, agust 2016)

Finance has an important role to play in all types of organization. But many thinkers presented their different views on how the finance performs …show more content…

He explain that though the firm is financially strong but due to factors like non enthusiasm for innovation, longer decision making process these firms are negative.

The size of the business is an important element which affects on innovation. The famous economist J.A.Schumpeter had hypnotized that large firms innovate more because they have the resources and finance freedom needed to invest in innovation and because their larger market power provides them with a higher capacity to reap the return from innovation. (Schumpeter, 1942). Similar to this (Schillweart, 2002) put his view as larger organization have greater propensity to innovate because of their better resources advantage & grater need to sustain & improve performance.
But many times larger firms are having many layers of corporate hierarchy, it makes longer decision making process and development of bureaucrats management .Small firms has a reverse role in introducing new products, processes and services (D.B, 1987).Sharpening to this thought (Jelling, agust 2016) stated that small firm’s are important innovator in an economy and they innovate many radical innovations. Large firms generally do incremental innovations and small firms do more radical innovations (2012, 2012).When innovation types like product or process is considered then small and large firms do not differs in innovation activates (Klepper, March 1992). The research

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