Most of the firms in developing countries achieve competitive advantage by adopting new processes, however, empirical literature has largely focused on new products, relegating process innovation to a second-order innovative activity.
This study proposes and constructs five quantitative metrics of process innovation output and delves into the factors influencing firms' decision to engage in process innovation and their success in achieving innovation outputs.
Main inducers: Breadth and depth of innovative capabilities; knowledge network embeddedness; extent and nature of competition.
Returns: Engaging in process innovation leads to immediate economic returns, boosting labor productivity and facilitating business expansion.
Adopting new processes leads to automation, but the study does not find evidence that new processes led to lower employment.
Access the full article by Dr. Waqar Wadho and Dr. Azam Chaudhry, Lahore School of Economics here.