The concept of innovative capacity and its impact on innovation outcomes. Illustrated by the Example of the German Aerospace Industry

Abstract

This paper investigates the impact of innovative capacity on innovation related outcomes, such as publications, patents, process and product innovations as well as technology readiness levels (TRL). Innovative capacity is derived from three indicators, namely human capital, relational capital and structural capital. For our estimation model, we use a unique dataset on innovative capacity and innovation activities by companies of the German aerospace sector. We find that the concept of innovative capacity has a strong impact on the analysed innovation dimensions. It can explain innovation outcomes in early stages by using patents and publications as innovations related outcomes. We find the strongest explanatory power of the model when we look at the impact of innovation capacity on product innovations. We also find some evidence by investigating the impact of innovative capacity on process innovations. This is different for the changes in TRL. Here we do not find any significance that innovative capacity influences the speed of technology development. However, the overall findings are promising: Innovative capacity is a relevant concept explaining innovation outcomes of firms within high-tech sectors, like the aerospace industry in Germany. A second basic result of our analysis is that self-reports by experts, who are in charge with innovation processes, deliver – at least to some extend – reliable data. For this reason, we are able to confirm statistically our theoretical assumptions, that innovative capacity is relevant for innovation outcome.