Size, Ownership and Sector: Sources of heterogeneity in firms ’ innovation activities

The paper seeks to provide a better understanding of firm behaviour by analysing qualitative features of innovation processes like motivations, dynamics and collaboration among actors. It is based on interviews conducted at around 20 innovative firms in 3 sectors (automotive, pharmaceuticals, and information and communication technologies), as well as on a statistical and institutional analysis of the Hungarian national innovation system (NIS). The sectors have been selected given their significant economic relevance in terms of employment, contribution to GDP and exports, as well as taking into account the major features of the overall Hungarian (NIS). The results confirm that size, ownership as well as sector cause fundamental differences in innovation strategies and activities of firms. In general, small, domestic firms lack the necessary skills and resources to devise explicit innovation strategies, and hence usually deal with business and technological uncertainties in an ad hoc manner. Hungarian subsidiaries of foreign firms, which tend to be large, usually organise their RTDI activities in accordance with the overall business and innovation strategies of their parent firm. The paper offers