Innovation Strategies of Polish Manufacturing Companies through the Business Cycle

Abstract

The paper analyses the differentiation of innovation activities and strategies of Polish manufacturing companies during economic expansions (2004–2008 and 2013–2014) and slowdowns (2009–2013) of the Polish economy. The research is based on the data from five databases of the Central Statistical Office, which overlap with the Community Innovation Survey (CIS). It is found that because companies are heterogeneous in their innovation resources, they also differ in the continuity of the innovation activities and strategies that they introduce. Some of them – persistent innovators – innovate continuously, while others – occasional innovators – innovate from time to time, most often during an economic upswing. There is also a group of challengers that initiate innovation activities irrespective of a slowdown. Although existing theories propose that research and development and, in more general terms, innovation activities are concentrated when output is low, aggregate data for many developed economies repeatedly show their procyclicality. In the paper, the author shows that it is possible to distinguish subgroups of Polish manufacturing companies whose innovation activity is procyclical and those in which this activity is countercyclical. Expenditures on R&D, machinery and technical equipment, technology and marketing as well as the commercialisation of innovations also differ across groups. Due to strong heterogeneity of the whole sample, the results of aggregate analyses may be misleading. The policies that support innovation in Poland should take this heterogeneity into account. It is also highly recommended that the needs of persistent innovators, occasional innovators and challengers be reassessed.

Keywords

• innovations
• innovation activity
• manufacturing firms
• poland
• aggregation bias