The Impact of Absorptive Capacity on Innovation in Peru

Luis Camilo Ortigueira-Sánchez, William C. Stein, Santiago Luis Risco-Martínez, María Fernanda Ricalde

Research output: Contribution to journalArticle in a journalpeer-review

Abstract

This research aims to determine absorptive capacity’s impact on innovation in SMEs in Peru. SMEs in Latin America tend to be characterized by technological backwardness, and innovations, if any, tend to be incremental in nature. In Peru, more than half of innovation activities are destined to the acquisition of capital goods. In this sense, rather than generate innovation, SMEs tend to adopt existing innovations. Thus, in order to reap the benefits of innovation adoption, SMEs must possess a high degree of absorptive capacity, understood as the firm’s capacity to value external knowledge, assimilate, and exploit it towards commercial ends. In this respect, Innovate Peru, an innovation agency, grants subsidies to SMEs for facilitating innovation adoption. In collaboration between the public and academic sector, data was recollected from 88 SMEs that were granted this innovation subsidy. This paper contributes to the literature on absorptive capacity and innovation within Latin America, which has been vaguely studied. Likewise, it holds practical implications for top managers from SMEs who are looking to innovative, and policy implications for innovation policy makers, as it validates the effect of an innovation policy instrument.
Original languageEnglish
Pages (from-to)19-29
Number of pages11
JournalJournal of Technology Management and Innovation
Volume15
Issue number4
DOIs
StatePublished - 2020

Bibliographical note

Publisher Copyright:
© Universidad Alberto Hurtado, Facultad de Economía y Negocios.

Copyright:
Copyright 2021 Elsevier B.V., All rights reserved.

Keywords

  • Absorptive capacity
  • Innovation
  • Innovation agency
  • SMEs
  • Latin America

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