Abstract

What makes some firms more innovative than others and what determines the source of these innovations are questions that are still not adequately answered due to the complex, often esoteric, nature of the innovation process. This paper considers the effect of one externally oriented strategy (extent of formal inter-organizational linkages) and one internally oriented strategy (degree of knowledge intensity) on overall levels of innovativeness and the source of these innovations. Using data collected from firms operating in the bioscience-technology industries in both New York and Utah, our results suggest that both of these strategies have a significant effect upon innovation levels and the source of innovation (internally versus externally stimulated). Interestingly, there were few firms that undertook both of these strategies simultaneously and thus the proposed interaction effect where increased absorptive capacity (on the basis of knowledge intensity) would make external linkages even more valuable could not be discerned.