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International Innovation Benchmarking & the Determinants of Business Success

Aims & objectives

The promotion of innovation is high on the policy agenda in Europe as attempts are made to close the perceived gap in productivity performance with the USA. In the UK a wide range of policy initiatives have been undertaken to promote the commercialisation of scientific and technical knowledge. In the UK and the rest of Europe the role that small entrepreneurial firms can play has also been the subject of intense debate, not least because of the perception that the recent renaissance in US productivity and economic growth performance is associated with a high level of technology based entrepreneurial activity. As a result of a major collaborative effort across the governments of the European Union an increasing amount is known about the comparative extent of innovative behaviour and the determinants of innovative success across member countries, and across size classes of firms. Within this project this was extended to a comparison between the UK and the USA carried out using new surveys. These involved a comparison of the level of innovative activities, the process by which innovation takes place and the barriers to innovation. The benchmarking exercise consisted of a comparative analysis of the inputs into and outcomes of innovative activity. It included an analysis of the extent and nature of collaborative strategies in both countries and of the extent and nature of interactions with the science base.

Although the richness of the dataset will permit a wide range of issues to be addressed in the econometric analysis we will focus on two issues, both of which are of particular interest in the analysis of small and medium sized enterprises, and where an analysis of them in relation to larger enterprises in a comparative international context will be made possible by the dataset created. The first of these is a link between networking, inter-firm collaboration, access to the science base and innovation performance. This has been a significant issue in the development of an enterprise based industrial policy in Europe and the UK, where the comparative performance of the USA is frequently alluded to as a role model. The second is the link between innovation performance management strategy and the financial and growth performance of the firm.

Results & dissemination

During 2004 we carried out surveys by telephone in both the UK and the US. The UK telephone survey resulted in 1,972 interviews and the US survey resulted in 1,518 interviews. The survey instruments included questions on the following topics: General characteristics of the company; Innovation and new technology; Principal products and competition; and Finance and capital expenditure – a total of 44 questions and 295 variables. The sectors were all manufacturing and the business services sectors, both sets being divided into high-tech and conventional sectors. Work has continued to explore the links between innovation and company performance and the differences between the two nations. The data have also been used to provide background information for the open innovation project which started in October 2009.

Discussion papers

UK, EU and US Innovation Comparison: Sources, Performances and Impacts

Innovation Benchmarking Methodology

Working papers & mimeos

Hughes, A. (2007) ‘Innovation Policy as cargo cult: Myth and Reality in knowledge-led productivity Growth’, Centre for Business Research Working Paper No. 348.

Hughes, A. and Lee, J. (2006) ‘What’s in a name and when does it matter? The hot and cold market impacts on underpricing of certification, reputation and conflicts of interest in ventur capital backed Korean IPOs’, Centre for Business Research Working Paper No. 336.

Hall, B.H. and Gambardella, A. (2006) ‘Proprietary vs. Public Domain Licensing of Software and Research Products,’ Research Policy 35, Issue 6, pp. 875-892.

Hall, B.H. (2006) ‘R&D, innovation, and productivity: new evidence from Italian manufacturing microdata,’ with F. Lotti and J. Mairesse, Bank of Italy, INSEE-CREST, UC Berkeley, and University of Maastricht, June 2006.

Hall, B.H. (2006) ‘The Private Value of Software Patents,’ with Megan MacGarvie, NBER Working Paper 12195 (April 2006).

Hall, B.H., Cosh, A. and Hughes, A. (2006) ‘Two countries divided by a single R&D-productivity-innovation relationship: A comparative study using a matched sample of UK and US firms,’ March 2006.

Cosh, A., Fu, X. and Hughes, A. (2005) ‘How much does informality in management matter for SME innovation?’. Award winning paper, 2005 ‘European Best Paper Award’.

Fu, X., Cosh, A. and Hughes, A. (2004) ‘Innovatability of manufacturing SMEs in the East of England: Statisitical analysis and econometric modelling’, Report for the i10 MAPSME Plus project, 2003.

Fu, X., Cosh, A. and Hughes, A. (2004) ‘Exploring the Middle Market’, Report for the Department for Trade and Industry (DTI), 2003.

Fu, X., Cosh, A. and Hughes, A. (2004) ‘SME growth trajectories’, Report for the Small Business Service, DTI, 2004.

Fu, X. (2004) ‘Exports, Foreign Direct Investment and Employment: the Case of China’, Centre for Business Research Working Paper No. 286.

Fu, X. (2004) ‘Exports, Technical Progress and Productivity Growth in Chinese Manufacturing Industries’, Centre for Business Research Working Paper No. 278.

Fu, X., Cosh, A. and Hughes, A. (2004) ‘Management characteristics, collaboration and innovation performance in the UK’, Mimeo.

Fu, X., Cosh, A. and Hughes, A. (2004) ‘How much does informality in management matters for SME innovation’, Mimeo.

Fu, X., Cosh, A. and Hughes, A. (2004) ‘Innovatability of small and medium enterprises, evidence from UK survey data’, Mimeo.

Fu, X., Cosh, A. and Hughes, A. (2004) ‘Management, human capital and SME growth’, Mimeo.

Fu, X, Cosh, A, Yang, Q and Hughes, A (2004) ‘Innovation in the UK, US and other OECD countries’ Mimeo.

Fu, X., Cosh, A. and Hughes, A. (2004) ‘Entrepreneurship, innovation and innovation potential: benchmarking performance in the regions’ Mimeo.

Fu, X., Cosh, A. and Hughes, A. (2004) ‘Innovation benchmarking: sampling frames and information sources (US)’ Mimeo.

Fu, X., Cosh, A. and Hughes, A. (2004) ‘UK, EU and US innovation comparison: sources, performance and impacts’ Mimeo.

Journal articles

Hall, B. (2006) ‘Proprietary vs. Public Domain Licensing of Software and Research Products’, with Alfonso Gambardella, Research Policy 35 (2006), Issue 6, pp. 875-892.

Hall, B. (2006) ‘Does the Market Value R&D Investment by European Firms? Evidence from a Panel of Manufacturing Firms in France, Germany, and Italy,’ with Raffaele Oriani, International Journal of Industrial Organization, in press 2006, available online at Science Direct.

Hall, B. (2006) ‘Property and the Pursuit of Knowledge: IPR issues affecting scientific research,’ with Paul A. David, Research Policy, Volume 35 (2006), Issue 6. Introduction to edited special issue.

Hall, B. (2006) ‘Empirical studies of innovation in the knowledge driven economy: An introduction,’ with Jacques Mairesse. Economics of Innovation and New Technology, Volume 15, Issues 4/5. Introduction to edited special issue.

Hall, B. (2005) ‘Exploring the Patent Explosion’, Journal of Technology Transfer 30: 35-48.

Fu, X. (2004) ‘Limited Linkages from Growth Engines and Regional Disparities in China’, Journal of Comparative Economics, 2004, vol 32, no. 1, 148-164.

Hall, B. (2005) Exploring the Patent Explosion, Journal of Technology Transfer , 30: 35-48.

Hall, B. and Harhoff, D. (2005) Post-Grant Patent Reviews in the United States – Design Choices and Expected Impact, Berkeley Technology Law Journal, 19: 989-1016.


Fu, X (2004) Exports, Foreign Direct Investment and Economic Development in China, Palgrave Macmillan, London and New York. 2004. (ISBN 1-4039-3644-7).


Connell, D. (2006) Secrets of the World’s Largest Seed Capital Fund Research Report, Centre for Business Research.

Cosh, A., Hughes, A. and Lester, R.K. (2006) ‘Innovation Efficiency – a Transatlantic Comparison’, in UK plc: Just How Innovative Are We?, Cambridge-MIT Institute, Cambridge, UK and Cambridge, US.

Cosh, A., Hughes, A. and Fu, X. (2006) ‘SMEs and Innovation’ in British Enterprises: Surviving, Thriving or Dying, edited by Cosh and Hughes, Centre for Business Research, University of Cambridge, 2006.

Fu, X. (2005) ‘Innovation in the EU and the USA: evidence from linked survey data’. CBR memo.

Cosh, A., Fu, X. and Hughes, A. (2005) ‘Determinates of Innovation in small ICT companies’, Report to the i10 MAPSME II project (including web-tool design).

Bullock, A., Innovation Benchmarking – UK Survey, CBR 2004.

Bullock, A. and Milner, I. (2003) ‘Innovation Benchmarking Methodology’.

Bullock. A, Fu, X., Milner, I. and Yang, Q.G. (2003) ‘Innovation Benchmarking: Sampling Frames and Information Sources (U.S).

Fu, X. and Yang Q.G., (2003) ‘UK, EU and US Innovation Comparison: Sources, Performances and Impacts’.

16 February 2006: UK Plc: Just how innovative are we?

23 November 2005: How Universities can support Industrial Innovation

25 November 2004: CBR research casts new light on UK innovation process

Project leader

Andy Cosh

Other principal investigators

Alan Hughes
Richard Lester (MIT)
Anna Bullock
Xiaolan Fu
Ana Siqueira
Isobel Milner

Visiting fellow

Bronwyn Hall (University of California, Berkeley)

Project dates



Cambridge-MIT Institute (CMI)