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To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.respol.2010.08.004 Byline: Rinaldo Evangelista (a), Antonio Vezzani (b) Keywords: Technology; Organizational innovation; Economic performance Abstract: By using firm-level data provided by the last round of the (Italian) Community Innovation Survey (CIS4) this paper explores (in a manufacturing-services comparative framework) the relationship between technological and non-technological innovations and their impact on firms' performances. The empirical evidence presented shows that including the organizational dimension of innovation provides a much more comprehensive picture of the variegated universe of innovation in both macro-sectors. Four distinct innovation modes have been identified on the basis of the ways firms combine technological and non-technological innovations. These different modes of innovation are present and relevant in both manufacturing and service sectors and have been found to have a differentiated impact on firms' performances. Strategies characterized by the joint introduction of product, process and organizational innovations have been found to give to both manufacturing and service firms a clear competitive advantage vis a vis both non-innovating firms and firms with a narrow approach to innovation. A few significant differences between services and manufacturing firms in the relevance and economic impact of different types of innovation strategies have also been found. Author Affiliation: (a) University of Camerino (IT), Piazza Cavour 19, 62032 Camerino, Italy (b) University of Rome Tor Vergata, Via Columbia 2, 00133 Rome, Italy Article History: Received 2 July 2009; Revised 9 July 2010; Accepted 24 August 2010 Article Note: (footnote) [star] The authors are grateful to three anonymous referees for their valuable remarks and suggestions.

A study presents empirical evidence on the magnitude, resources consumed and economic impact of innovation on the manufacturing industry. A 1993 Italian National Statistical Institute survey provides the data for the evaluation. Activities and processes that make the components for innovation are likewise evaluated. Results reveal that sectoral and size composition are primary determinants of innovation activities within firms, while technological change is cumulative in nature.

The impact of technological innovation on the Italian manufacturing industry was examined. Specifically, the effect of process and product innovations on employment was investigated at the firm level. The relationship between employment, technology, structural change and economic growth was also studied at the sectoral level. The results showed that employment is inversely proportional to productivity growth in Italy.

Research was conducted to examine technological innovation in the manufacturing and service industries. Systematic information was obtained from an innovation survey performed in Italy by the National Statistical Office in collaboration with the Institute for Studies on Scientific Research and Documentation of the National Research Council. Results offer the first empirical evidence on various aspects of innovation activities in the service industry and highlight substantial differences and similarities with the manufacturing sector.