Innovation Capabilities : The Knowledge Capital Behind the Survival and Growth of Firms

This paper summarizes the findings of a research program aimed at outlining the importance to the firm growth process of competencies that arise from investments in intangible assets. The program has consisted of two parts. First, longitudinal databases have provided a rich set of studies on entry, exit, mergers and other aspects of dynamics related to growth and decline in firm populations. These studies have shown the pervasiveness of growth and decline in the firm population. By themselves, these studies do not demonstrate what strategies differentiate the most successful from the least successful. To do so, we have built a set of firm surveys that allowed profiles to be developed of the type of competencies that stem from investments in organizational capital. In turn, these are linked to administrative data that allow us to classify firms as either growing or declining. We then asked how differences in competencies were related to the performance of firms