No 2013/27 User-producer interaction and the degree of novelty of innovations

a global perspective

Abstract

User-producer interactions have been traditionally recognized as important for innovation. With the rapid growth of emerging economies’ markets, and an increasing degree of technological sophistication of both users and producers in those markets, user-producer interaction is becoming global. The existing literature is quite limited in explaining how collaboration with users in different income regions affects the degree of innovations’ novelty. Using original firm-level data collected in nine countries, this paper argues that collaborating with international customers is positively related to higher degrees of novelty. Furthermore, firms in low- and middle-income countries will benefit more from south-south collaboration than a south-north one, at least in terms of collaboration with customers for innovation.