EXTERNALLY-ASSISTED PRODUCT INNOVATION IN THE MANUFACTURING SECTOR - THE ROLE OF LOCATION, IN-HOUSE RESEARCH-AND-DEVELOPMENT AND OUTSIDE TECHNICAL-SUPPORT

This paper examines the role of internal and external technical activi ty in the product innovation tendencies of New York State manufacturin g firms. Evidence from a sample of electrical industrial equipment pro ducers suggests that innovation rates are significantly higher among f irms that subcontract specialized technical work to external consultan ts. A set of logistic regression and discriminant models are presented which show that locational factors play an important role in the inno vation relationship. Specifically, the probability of successful produ ct development is found to be noticeably higher in regions that contai n rich stocks of advanced producer services. The paper concludes with a brief discussion of the role of regional factors in successful produ ct innovation.