How do ICT firms in Turkey manage innovation? Diversity in expertise versus diversity in markets

This paper provides a novel taxonomy of firms based on specialisation versus diversification in production and markets. Firms may chose to specialise on few production activities or alternatively may build expertise in many activities. There is an accompanying decision when firms sell their products: whether to serve few or many markets. We argue that the location on the specialisation-diversification spectrum significantly affects how firms manage innovation. For a sample of 90 innovator ICT firms in Ankara we find that cooperation structure, sources of innovation and funding of R&D display statistically significant different patterns according to the specialisation-diversification taxonomy.