Evidenced based decision making in public policy for innovating firms

Abstract

Firms require policies that are supportive to their operating environment and competiveness. Few firms, however, interact with policy makers and it is suggested in the literature that they do so in a self-interested manner. Policy makers are faced with the challenge of ensuring positive sum outcomes in a highly politicised process. Innovative firms could possible request more value creating policies with noninnovative firms requesting value capturing policies. A firm that is more networked is more innovative, but this also increases the management complexity of the firm. The purpose of this study was to enable policy makers to make more informed political decisions in the public policy process. A secondary dataset focused on firms in the innovation context. Groups of firms were categorised by their innovativeness, involvement with policy and network richness through Chi-square tests, Exploratory Factor Analysis and Cluster Analysis. The policy requests of these firms were analysed through the Kruskal-Wallis test, with post hoc analyses using Mann-Whitney U tests. The study found that firms could be categorised based on their innovativeness and involvement, but that network richness played an important role in increasing both. Innovative and non-innovative firms had similar needs in policies. It is suggested that richly networked firms are not independently rent seeking as they request policies that are to the benefit of the broader innovation network in order to sustain and grow the collaborative relationships. Policy makers are advised to ensure the inclusion of network rich firms in the policy process.