Innovation does not equal R&D: Strategic innovation profiles and firm growth

In this paper, we examine firm innovation and its link to firm growth. Instead of using the conventional conceptualization and operationalization of innovation in terms of the R&D budget, we use a more elaborate 12-dimensional conceptualization, which takes into account also the non-technological aspects of innovation. The 12-dimensional operationalization further enables the examination of strategic innovation profiles of individual firms. We find that different kinds of innovation activity all have effects on firm growth, but in different ways. R&D activity is important in that it leads to introduction of new products, but innovation in other dimensions - value chain strategy, brand, and distribution channels - is also linked to new product introduction. Value chain innovation is also related to the development and introduction of new services: innovation aimed at development and improvement of the customer experience in particular has a significant role in the development and introduction of new services.