Forsaking innovation: addressing failure and innovation behaviour variety

This paper analyses how innovation active firms respond when innovation projects fail or are abandoned. We regard innovation as a process where firms engage in a variety of behaviours combining internal and external characteristics including their propensity to cooperate, to compete, to engage in research and development activities as well as on the composition of their knowledge base. We compare how their aggregate innovation behaviour responds when failure is experienced. Using data from the UK innovation survey, our results first highlight that failure has an effect only on specific innovation strategies, and second, when failure occurs, it can either reinforce existing behaviours or reverse them.