Innovation and firm performance: A comparative study of rapidly developing economies & the European Union

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Southern New Hampshire University
This dissertation analyzes the innovation efforts of large, technology-intensive firms as they pertain to firm performance. The research examines two distinct groups of technology intensive firms deriving from countries with opposing stages of economic development and contrasting demographics of their populations: Rapidly Developing Economies (RDEs) and European Union (EU) countries. Technology enables firms to re-imagine their core competencies, improve existing processes, and model improved processes and routines. By understanding the return on investing in innovative pursuits, firms could adapt strategic business models to capture firm growth that has previously been under-developed and secure a competitive advantage. Likewise, local and national government agencies could offer specific incentives to help ensure longevity and sustainability to their position in world markets and identify previously untapped trading partners and strategic alliances. In addition, strategists would be better equipped to support and target R&D initiatives during declines in the market and/or industry. The results are reported according to manufacturing and service industries. The studies indicate that the most profitable firms derive from the service sector versus manufacturing. Custom Computer Programming firms represents the highest profit margins in EU countries and Computer Programming Services represents the highest profit margins for RDE countries. Despite more firms being represented from RDE than the EU, these firms do not spend more than large, technology firms from the EU. Upon investigating which group acquired more patents, it was found that RDE countries have more patents granted than EU countries. In addition, RDEs currently have more high-tech exports as a percentage of manufactured goods per capita than EU countries. The impact of the global recession appeared to have an impact on large, technology-intensive firms in the EU in particular, while a majority of RDE firms have already returned to or have exceeded pre-recession levels. The incorporation date was also examined to determine both the age of firms included in the study, as well as the labor capital of both groups. It was determined that RDE firms included in the study hire significantly more employees than EU firms, and more manufacturing employees were hired than those in the service sector.(Author abstract)