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Investment in training and skills for innovation in entrepreneurial start-ups and incumbents: evidence from the United Kingdom

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Abstract

Firms that aim to compete globally have to invest in knowledge and have to use knowledge returns to increase their competitive advantage. This paper extends our understanding of returns to knowledge investment by focusing on innovative training and skills in entrepreneurial organizations and incumbents, as well as the role of legal protection in further investment in knowledge. Using novel innovation data for a panel of 4049 firms in the UK, this paper estimates the training premium for the country’s most innovative firms. Returns on training vary between start-ups and incumbents and during economically-constrained times. Specifically, the study highlights evidence for higher returns on training during times of crisis and lower returns before the crisis. In filling a gap in the calculation of returns to investment in knowledge creation within organization, the study advances our understanding on how entrepreneurial firms need to invest in training and skills to increase innovation outcomes.

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Notes

  1. For more information on CIS and what these datasets contain see: http://www.nswebcopy/StatBase/Source.asp?vlnk=926&More=Y

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Acknowledgements

We would like to thank Professors Ashish Arora and Suma Athreye as well as Professors David Audretsch, Herman Aguinis and Davide Castellani for support and insights. We are particularly grateful to Sowmya Kypa from Indiana University for her excellent research assistance.

The work has been a part of the project titled “Knowledge frontiers and boundaries for the New UK” sponsored by the British Academy “Tackling the UK’s International Challenges” Award Reference: IC160084. Yulia Rodionova gratefully acknowledges funding from De Montfort University ECR Scheme.

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Authors and Affiliations

  1. Henley Business School, University of Reading, Whiteknights, Reading, RG6 6UD, UK

    Maksim Belitski

  2. Parthenope University of Naples, Via Generale Parisi 13, 80132, Napoli, Italy

    Rosa Caiazza

  3. The Russian Presidential Academy of the National Economy and Public Administration, Prospect Vernadskogo, 84, Moscow, Russia, 119571

    Yuliya Rodionova

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  1. Maksim Belitski
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Correspondence to Rosa Caiazza.

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Appendices

Appendix A

Table 4 Training premium equation: Model 1 (cross-section estimation by CIS)
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Table 5 Equation: Model 2 (panel data estimation)
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Table 6 Training -premium equation: Model 3 by firm age
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Appendix B

Table 7 Early stage literature review of the returns to training for firm performance in management and innovation literature
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Belitski, M., Caiazza, R. & Rodionova, Y. Investment in training and skills for innovation in entrepreneurial start-ups and incumbents: evidence from the United Kingdom. Int Entrep Manag J 16, 617–640 (2020). https://doi.org/10.1007/s11365-019-00606-4

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