In his Theory of Economic Development (1934), Schumpeter introduced the distinction between different innovation types (namely product and process innovations). Since then, a variety of studies have addressed this topic by mainly focusing on the relationship between different types of innovations and selected economic determinants (i.e. firms' size, market structure, appropriability and imitation methods and firms' performance). However, despite of the recognised significance of more de-verticalised organisational forms in shaping and directing firms' innovative performance, no attempt has been made, as far as our knowledge is concerned, to investigate whether this practices are linked to the introduction of specific innovation types.
The aim of the study is to fill this gap by investigating the impact of de-verticalised forms of labour organisational practices, different modes of organising R&D activity and the nature of employees' competences (whether new to the firm or reshaped) on the likelihood of introducing different types of innovations (i.e. product, process and quality innovations), controlling for firm's size and sectoral specificities.
The results obtained on a sample of 199 firms located in Reggio Emilia province confirms that innovation development is a heterogeneous activity as shown by the different impact that the variables considered have on product, process and quality innovations. The empirical evidence gathered also shows that foreign and domestic firms do not differs, to some extents, in the introduction of different kinds of innovations. However, being foreign or domestic is a discriminating factor in the introduction of innovations stimulating labour organisational developments most probably as a result of the fact that foreign large firms operating in industries where local competencies are stronger are more flexible than domestic ones.