Innovation, quality management and learning: Short-term and longer-term effects

Abstract

Quality-orientated management change and innovation are central strategies for firms. Implementing both quality improvement and innovation poses significant managerial, organisational and technical challenges, and may also involve significant lags before benefits are realised. Here, using data on a large group of Irish manufacturing plants and econometric analysis, we establish the short- and longer-term influence of plants’ adoption of quality improvement methods (QIMs) on product innovation performance. Our study highlights the short-term disruptive and longer-term beneficial effects of QIM adoption on product innovation performance. In addition, we find evidence of complementarities and learning-by-using effects from QIM adoption. Our results suggest that maximising the returns to innovation and quality improvement requires consideration of the soft and/or hard nature of individual QIMs and the timing and sequencing of their adoption.