Intellectual capital as enhancer of product novelty: an empirical study of Russian manufacturing SMEs
Purpose: the paper aims to theoretically justify the link between the endowment of intellectual capital and product novelty, and to find empirical evidence for such a link for SMEs in the Russian business environment.
Design/methodology/approach: the study implements an intellectual capital based view and the concept of novelty proposed by Schumpeter to highlight the crucial role of knowledge for transition to a higher level of competition. Drawing on a literature review, the authors determine three specific components of intellectual capital: foreign human capital, ICT capital developed at an international level and cooperation with foreign partners in order to pinpoint a premier position on the next level of the market. For empirical testing of the proposed model, a dataset comprising more than 1400 Russian manufacturing SMEs was used. Estimations were performed with the help of a principal component analysis and ordinal logistic regression.
Findings: the findings reveal that higher intellectual capital endowment promotes the level of product novelty. For Russian manufacturing SMEs, the most important is R&D capital. At the same time, ICT capital developed at an international level and cooperation with foreign partners contribute significantly to the probability of transition to a new market level.
Research limitations/implications: the study employs cross sectional data that restrict the analysis of innovation dynamics.
Practical implications: the study appears to have policy implications for the development of governmental programmes for Russian SMEs such as the creation of IC awareness, training for IC management, special programmes for R&D support and ICT capital accumulation.
Originality/value: this paper proposes a new approach for investigating the “knowledge-innovation” link, shifting the focus from a general analysis of product innovation to a level of novelty for product innovation. This is the first empirical study of the relationship between intellectual capital components and the level of product novelty for SMEs in the context of the Russian business environment.