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We discuss the strengths and weaknesses of five alternative innovation indicators: R&D, patent applications, total innovation expenditure and shares in sales taken by imitative and by innovative products as they were measured in the 1992 Community Innovation Survey (CIS) in the Netherlands. We conclude that the two most commonly used indicators (R&D and patent applications) have more (and more severe) weaknesses than is often assumed. Moreover, our factor analysis suggests that there is little correlation between the various indicators. This underlines the empirical relevance of various sources of bias of innovation indicators as discussed in this paper.R&D, Innovative Output, Total Innovation Expenditure, Patents, Factor Analysis,

This review examines 43 recent papers about factors behind success and failure of innovative projects. Nine out of the 43 papers report a larger number of possible causes for success or failure and provide some rank ordering. Analyzing these rankings we find that the nine studies have a significant degree of similarity among the ten highest-ranking success factors; however, there is little similarity among lower ranking factors. The various studies remain either inconsistent or inconclusive with respect to factors such as strength of competition, R&D intensity, the degree to which a project is "innovative" or "technologically advanced" and top management support. Agreement exists, however, about the positive impact on innovative success of factors such as firm culture, experience with innovation, the multidisciplinary character of the R&D team and explicit recognition of the collective character of the innovation process or the advantages of the matrix organization.

Unlike internal (‘functional’) forms of flexibility of labour, external (‘numerical’) forms of flexibility (i.e. high shares of people on temporary contract or a high turnover of personnel) yield substantial savings on a firm’s wage bill. Savings on wage bills lead to higher job growth, but do not translate into higher sales growth. Externally flexible labour appears to be related to lower labour productivity growth, the effects being different for innovating vs non‐innovating firms. We discuss these findings from firm‐level and worker‐level data against the background of the Dutch job creation miracle during the 1980s and 1990s. Modest wage increases and flexibilization of labour markets may indeed create lots of jobs. However, this is likely to happen at the expense of labour productivity growth, raising serious doubts about the long‐run sustainability of a low‐productivity–high‐employment growth path.Flexible labour, determinants of labour productivity growth, wage costs, firm growth and employment, J23, J31, J53, M51, O31,

Firms with high shares of workers on fixed-term contracts tend to have higher sales of imitative new products but perform significantly worse on sales of innovative new products ("first on the market"). High functional flexibility in "insideroutsider" labor markets enhances a firm's new product sales, as do training efforts and highly educated personnel. We find weak evidence that larger and older firms have higher new product sales than do younger and smaller firms. Our findings should be food for thought to economists making unqualified pleas for the deregulation of labor markets.