The paper adds to the literature on the barriers to innovation in two ways. First, we assess comparatively what mostly constrains firms' ability to translate investment in innovation activity into new products and processes, whether it is mainly finance, as most of the literature would suggest, or whether it is mostly knowledge and marketrelated aspects. Second, we suggest a method to correct for the sample selection bias that often affects empirical contributions to this scholarship. By filtering out firms that are not interested in innovation from those that struggle to engage in it, we obtain a relevant sample of potential innovators, which allows us to analyse the comparative effect of financial and non-financial barriers on innovation success. We find that demand-side factors, particularly concentrated market structure and lack of demand, are as important as financial constraints in determining firms' innovation failures. This evidence redirects attention from financial to non-financial barriers by considering traditional demand, market structure and regulation factors involved in reduced firm innovation performance. The empirical analysis is based on an unbalanced panel of firm-level data from four waves of the UK Community Innovation Survey (CIS) between

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Abstract The present document provides the take of innovation economists on the COVID-19 pandemic. It targets the general public and focuses on questions related to the Science, Technology, and Innovation ecosystem. It provides a reading of current real-world developments using economic reasoning and relying on existing economic research.

In this paper we investigate how the knowledge production function is at work in different industrial sectors comparing mature and young companies in Italy. We estimate a two-step model using community innovation survey data. We provide evidence that young firms are particularly effective in translating R&D into product innovation in 'entrepreneurial sectors' (especially in services where it is likely that capital requirements and experience are negligible), while mature companies turn out to be more effective in translating technological acquisitions (TAs) into process innovation in 'routinized sectors' (especially in low-tech manufacturing industries where the main strategy is cost reduction).

This article explores the relations between firm growth and a set of four innovation indicators (inhouse R&D, external sourcing, product innovation, and process innovation) that capture the different sources, modes, and outcomes of the innovative strategies adopted by firms. While existing studies tend to focus on the individual effects on growth of each innovation activity, we stress that firms adopt heterogeneous innovation strategies, choosing to perform different combinations of the basic innovation activities. We directly address the empirical question as to whether jointly performing two basic innovation activities boosts sales growth above and beyond the separate contribution of each innovation activity when performed individually. Exploiting a panel of Spanish manufacturing firms observed between 2004 and 2011, we document instances of super-modularity of the growth function, and reveal the presence of complementarities between internal R&D and product innovation, and between product and process innovations. As such, the combination of these three basic innovation activities appears to be the most effective strategy for sustaining growth and market shares, while external sourcing does not appear to make any systematic contribution.