Understanding New Zealand firm innovation: exploring human resource factors by firm size and strength

Abstract

Firm innovation is of vital importance to New Zealand’s economy, but we understand little about how different human resource (workforce) factors influence innovation approaches (product/services innovation, process innovation, and innovation speed). We explore three human resource (HR) factors: workforce knowledge, skills, and abilities (KSAs), workforce attraction, and workforce retention, using a sample of New Zealand private sector firms (n = 402). Regression analysis shows all HR factors are significant predictors of all innovation approaches. Further analysis shows workforce KSAs is dominant towards product/service innovation, workforce attraction is dominant towards process innovation, and workforce retention is dominant towards innovation speed. Moderating effects by firm size are found showing small-sized firms out innovate large-sized firms when workforce KSA are high, despite small-sized firms having, on average, weaker HR factors and innovation approaches than large-sized firms. We highlight the organisational implications across small–and large-sized firms.