Innovation modes and design as a source of innovation: a firm‐level analysis

Purpose - The purpose of this article is to contribute to the empirical literature, which investigates innovation modes, by exploring the role of design as a source of innovation. Design‐methodology/approach - The empirical analysis is carried out at the firm‐level, on the ground of a recent survey covering more than 5,000 European firms. A factor analysis is carried out first, followed by a cluster analysis based on identified factors in order to ensure a significant number of homogeneous groups of firms. Findings - The paper finds that: design and R&D are complementary sources of innovation; design is predominant in firms characterized by a complex innovation strategy and intense interactions with the external environment; and these types of firms also show better economic performance. Social implications - Policies should recognize the importance of design‐based competences, as they differ from those related to R&D activities. Originality/value - To date, in this empirical research, R&D activity is regarded as the major internal source of knowledge, as well as a fundamental driver of firms' competitiveness. This paper's results show how design enters in this framework and suggests future research directions.