INNOVATION CLIMATE AS A SOURCE OF COMPETITIVE ADVANTAGE

Innovation is the result of the interactions and exchanges of knowledge involving a diversity of actors in situations and interdependences (Landry, Amara, & Lamari, 2002). Innovation requires the convergence of different kinds of knowledge from different types of actors (Landry et al., 2002). There is scarce literature measuring innovation potential. In this work the well-known Tidd et al. (2005, pp. 566-568) instrument for measuring innovation climate is used. The instrument measures five categories, namely strategy, processes, organization, ties and learning. On grounds of an internet survey of the Croatian manufacturing sector Croatian innovative audit is presented. The survey targeted 2443 Croatian manufacturing companies with over 10 employees. After two months of the launch of the survey 135 valuable questionnaires are obtained. The instrument shows that Croatian average innovation climate index is 4,7 out of 7 which means that there is much potential for improvement. Using factor analysis the questionnaire is tested, because so far we could not find the validation of the instrument. The results show that indeed the instrument has high validity. Then using structural equation modeling, the effects of organizational climate on new product launch, time to market and revenues from new products is evaluated. The results show that strategy and learning have the biggest influence on number of innovations; ties have the biggest influence on time to market of new products, and organization has the biggest influence on revenues from new products.