In a recent study, economists looked at rates of innovation among industries and firms. The study included self-reporting measures across rural and urban sites.
“In addition to the question about whether they introduced a significantly improved product, we can also ask questions about whether they had behaviors that were consistent with what we thought innovative firms would do,” said Timothy Wojan, a senior economist working for the Economic Research Service, a division of the United States Department of Agriculture.
While we typically think of innovation as our successes, Wojan highlights the importance of innovation as a means to help us learn from failures.
“The reason behind that is that firms that are engaged in innovation at a substantive level are going to recognize the value of failures in their eventual success whereas firms that sort of never try to innovate aren’t going to recognize that a failure is a good thing necessarily,” Wojan said.
Innovation in this way includes factors such as short-and long-term changes, like whether or not industries had a continuous improvement process or whether or not the firm or industry has produced intellectual property.
“The main finding of this study of self- reported innovation is that we are trying to get beyond a narrower definition of innovation which is related more to science and engineering and patenting and certainly if you’re using those indicators as a metric rural firms would appear to lag behind their urban counterparts," Wojan said. "However, with this survey and the studies we’ve done if you’re looking more at a grassroots innovation that might not require scientists and engineers or a formal R&D [Research and Development] budget both rural and urban firms seem to be much more at a level playing field."
Whether thinking short-term or long-term, the report indicates that firms and industries who self-reported higher rates of innovation had an increased chance of long-term survival.
Read the original ERS report here.
An additional publication on this research titled 'Varieties of innovation and business survival: Does pursuit of incremental or far-ranging innovation make manufacturing establishments more resilient?' can be found at the link here.