What Is the Right Innovation Type for Your Industry? Evidence from Chemical Firms in Korea

Abstract

The literature has two different perspectives on which innovation types should be implemented to achieve innovation performance; some argue that they should pursue process-oriented innovation, while others maintain that both product- and process-oriented innovation should be performed. Though innovation efficiency should be measured, which takes both input and output variables into account, the research so far has been measured only with the performance of the innovation. Accordingly, this study identifies which innovation type is the most advantageous in terms of innovation efficiency for the chemical firms. We use data of 64 Korean chemical companies from a 2016 Korean innovation survey and perform data envelopment analysis to calculate innovation efficiency. Kruskal–Wallis one-way ANOVA and bootstrap DEA were also conducted to compare the difference of innovation efficiency among groups, depending on which innovation types are oriented. The result shows that focusing on process innovation rather than both product and process innovation is more appropriate to achieve higher innovation efficiency, and pursuing process innovation rather than product innovation tends to achieving a higher level of innovation efficiency in the Korean chemical industry.

Special Issue on Performance Measurement and Optimization for Sustainable Production Processes Improvement

“…Shin et al [3] tried to find the right innovation type in chemical industry using data envelopment analysis. They used 64 Korean chemical firms from a 2016 Korean innovation survey.…”

The Centrality of Brand Awareness

“…Although product innovation is believed to improve businesses' competitiveness, growth, and profitability (Freixanet & Churakova, 2018), scholars and business practitioners are aware that product innovation is very risky (Shin et al, 2019) and has an 80% failure rate (Malgarejo & Malek, 2018). According to Malgarejo & Malek's report (2018), only 5% of such product innovation managed to appeal to customers, and this low success rate is determined by how a brand demonstrates appeal and shows innovativeness to their customers.…”