Push or Pull? The nature of innovation process in the Hungarian food SMEs

Abstract

In the European Union and in Hungary, the food and beverage industry is the leading manufacturing one. By contrast, food industry is seen less innovative compared to other branches of the economy, especially in the European Union. The level of the R&D spending is very low in the Hungarian food sector. Our paper applies Schmookler’s demand pull innovation model in order to explore how external impetuses and internal knowledge resources influence the innovation development in the Hungarian agrifood industry. We applied OLS and hurdle regressions on a large and representative sample of Hungarian food SMEs, covering the whole supply chain. Results show that tacit knowledge is more prominent than explicit one. The use of internal tacit knowledge is significant and relevant in the innovation production process. On the other hand, R&D spending has a negative influence on innovation’s success among the food SMEs.