Abstract
This research is undertaken to improve innovation prediction. Similarities and differences between physical goods innovation and service innovation are highlighted in order to discover more universal predictors of innovation than those currently available. To do so, this dissertation focuses on the overarching importance of knowledge to any form of innovation. As a result, predictors are employed that emphasize knowledge generation and acquisition. Specifically, internal drivers of innovation based on investments in human capital (i.e. employees) are investigated along with investments in external strategic partnerships vis-à-vis positions of firms in strategic networks. The effectiveness of these predictors is compared to traditional predictors such as research and development and marketing expenditures across three essays and 53 industries. In the first essay, investments in human capital are identified as superior predictors of innovation as compared to research and development and marketing expenditures. In the second essay, position in a network of strategic partners (i.e. centrality, constraint, and range) is assessed as an external predictor of innovation. The results of the second essay suggest that having many strategic partners (being central) and controlling the flow of knowledge among those partners (being unconstrained) are positively related to innovation. Finally, in the third essay, internal and external predictors are combined with the characteristics of strategic partners in a network analysis. The results support the findings of the first two essays and further suggest that firms should consider the resources of both their direct and indirect strategic partners when attempting to innovate. Taken together, the results of the three essays highlight the value of more universal predictors of innovation and suggest that managers and researchers focus on the basics of knowledge creation and acquisition when pursuing innovation.
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