Dealing with the risks of innovation: a study of capital goods producers in Portugal

Abstract

Product innovation is a subtle process, frequently leading to shifts in the competitiveness of firms. Developing products in an environment undergoing technological change is given to frequent failure, even in well-established and sophisticated organizations. In order to tackle competitiveness and to deal with innovation uncertainty, firms develop modes of innovation and innovation processes. In this study, we analyze the dominant uncertainties associated with the innovation process and modes of innovation of leading equipment and machinery producers. For that purpose we analyze the presence and types of risks and uncertainties applied to product innovation, and we test the use of two modes of innovation proposed in recent literature: (1) the Science, Technology, and Innovation (STI) mode, which is based on the production and use of codified scientific and technical knowledge, and (2) the Doing, Using, and Interacting (DUI) mode, which relies on informal processes of learning and experience-based know-how. The study is based on an exploratory multiple case study of producers of equipment and machinery in the industrial region of Aveiro, Portugal, and carried out under the research "Project Enterprise of the Future" at the University of Aveiro. The results of our study highlight several avenues that can help researchers to better channel their efforts in studying the phenomenon and help managers to foster innovation at their companies and in this way their firms' competitiveness.