INNOVATIVE CAPABILITIES AND CHOICES IN THE NORWEGIAN AQUACULTURE VALUE CHAIN

Ole Bergesen*
 Department of Industrial Economics, Risk Management and Planning
 University of Stavanger
 N-4036 Stavanger, Norway
 ole.bergesen@uis.no
 

The Norwegian seafood industry has experienced sustained growth for the past decades, primarily as a result of increased aquaculture production. Earlier research has stressed the role of innovation and technological change as explanations for the growth in aquaculture. In this paper we will shed more light on the innovation process by using data from innovation surveys matched with wage and employment data. Firms depend on several types of knowledge in their innovation processes. Innovation in aquaculture is increasingly dependent on research based knowledge. The decision problem of a firm aiming to increase its knowledge base and ability to innovate includes internal recruitment of different types of skilled employees and collaboration with different types of external organizations.

The dataset used for the econometric analysis is constructed by combining 5 innovation surveys with data on employment and wage. When combined the surveys covers the years 2000-2010. The surveys contains questions on R&D personell and cooperation in innovation processes. Firms are polled on three types of innovation; product innovation, process innovation and radical innovation. Product- and process innovation represents innovations new to the firm, while radical innovation represents innovations new to the market.

Aggregate innovation rates display a pattern where aquaculture farming favors process innovation over product innovation. Aquaculture services have generally high innovation rates. Food producers and wholesalers display a pattern of moderate innovation rates for all types of innovation.

The patterns from analysis of the full dataset using logit models are that number of employees and wage level significantly increases the probability of product- and process innovation. Higher evenue, when firm size is controlled for with number of employees, significantly decreases the probability of product- and process innovation. For radical innovation the coefficients display the same pattern, but the effects are not significant.

We find that aquaculture services are significantly more innovative than aquaculture farming for all three types of innovation. Seafood production has a significant and positive effect for product and radical innovation. Wholesalers are only significant for product innovation. When we combine data on innovation rates with the econometric analysis a pattern emerges. Innovation in the aquaculture industry is focused in services and juvenile production, not in farming. Further down the value chain both food producers and wholesalers engage in product and process innovation.