Successful innovation depends on the development and integration of new knowledge in the innovation process. In order to successfully innovate, the firm will combine different innovation activities. In addition to doing own research and development, firms typically are engaged in the acquisition of knowledge on the technology market and cooperate actively in R&D with other firms and research organizations. In this paper we provide evidence on complementarity between different innovation activities. Using data from the Community Innovation Survey on Belgian manufacturing firms, we show that firms that are only engaged in a single innovation strategy, either internal R&D activities or sourcing technology externally, introduced fewer new or substantially improved products compared to firms which combine internal and external sourcing. This result is consistent with complementarity between own R&D and external technology sourcing activities. Furthermore, we show that the different innovation activities are strongly positively correlated and identify common drivers, resulting in the perceived complementarity between these innovation activities. An important finding is that a capacity to strategically protect intellectual property and a more basic R&D base which may serve as an absorptive capacity, are important common drivers for the different innovation activities.

This paper characterizes the innovation strategy of manufacturing firms and examines the relation between the innovation strategy and important industry-, firm- and innovation-specific characteristics using Belgian data from the Eurostat Community Innovation Survey. In addition to important size effects explaining innovation, we find that high perceived risks and costs and low appropriability of innovations do not discourage innovation, but rather determine how the innovation sourcing strategy is chosen. With respect to the determinants of the decision of the innovative firm to produce technology itself (Make) or to source technology externally (Buy), we find that small firms are more likely to restrict their innovation strategy to an exclusive make or buy strategy, while large firms are more likely to combine both internal and external knowledge acquisition in their innovation strategy. An interesting result that highlights the complementary nature of the Make and Buy decisions is that, controlled for firm size, companies for which internal information is an important source for innovation are more likely to combine internal and external sources of technology. We find this to be evidence of the fact that in-house R&D generates the necessary absorptive capacity to profit from external knowledge acquisition. Also the effectiveness of different mechanisms to appropriate the benefits of innovations and the internal organizational resistance against change are important determinants of the firm's technology sourcing strategy.

English Abstract: Using Innovation Survey Data from Colombia, we apply a new methodology to assess complementarity relationships among different innovative inputs. This approach allows scholars to prevent serious data drawbacks, such as the lack of proper performance measures and is also fairly general, allowing cross equations restrictions. Empirically, we found evidence for the absorptive capacity hypothesis and the key role played by ICT.Spanish Abstract: A partir de los datos de la Encuesta de Innovación de Colombia, se aplicó una nueva metodología para evaluar las relaciones de complementariedad entre los distintos “inputs'' innovativos. Este enfoque permite a los académicos evitar graves inconvenientes en los datos, tales como la falta de medidas para un desempeño adecuado y además es bastante general, permitiendo cruzar las restricciones de las ecuaciones . Empíricamente, encontramos evidencias para la hipotesis de la capacidad absortiva y del papel fundamental que desempeñan las TIC.

This dissertation proposes and examines an empirical production function of innovation to gain insights on production itself, the disclosure of information in patents, organization choice and efficiency, and lastly the strategic consequences of different growth strategies. Using patent citations in the Information Technology industries, I measure the degree of complementarity among knowledge inputs. This measurement reveals the persistence of strong complementary inputs across both firms and time in the production of innovation. It is shown that the degree of input complementarity embodied in a patent significantly affects the value of the innovation. This relationship provides empirical insights on first mover advantage and information disclosure in published patents. Next, I measure complementarity in the downstream use of various innovation portfolios. This portfolio level analysis focuses on the selection choices and efficiency of different organization types, including firms, joint ventures, and licensing agreements. It is shown that output complementarity significantly explains both the selection biases and efficiency of these different organizations. Lastly, an agent-based computational model is constructed on top of the empirical patent landscape. Using simple rules-of-thumb, agents create innovations by acquiring and combining knowledge inputs. The agents receive value for these proposed combinations if and only if the combinations represent empirical patents. I use this model to reveal and analyze the strategic concerns with the timing of growth strategies. Also, the model provides insights on the impact of the publication of information, by the patent office, on innovation.